What Insurance Rate Boosts Mean for COBRA Participation
May 26, 2015
Affordable Care Act COBRA Administration General Helpful Hints & Tips
With the arrival of Marketplace plans over five years ago, most COBRA administrators and those in the industry wondered what was to become of COBRA, and COBRA software. While there are some benefits to both options. Travisoft is more confident than ever that COBRA will continue to thrive -- and be a competitive choice after loss of coverage.
The front page of the Wall Street Journal recently included an article about proposed Marketplace rate hikes by most insurers for the 2016 plan year.
Market leaders in the following states have requested these rate increases:
- New Mexico – increase of 51%
- Tennessee – increase of 36%
- Maryland – increase of 30%
- Oregon - increase of 25%
These proposals are important, because all insurers are saying that the increase in premiums is needed due to the high medical costs of people newly enrolled under the Affordable Care Act.
Not all insurers are seeking such hefty increases, but it will be interesting to see how the Obama Administration responds to these proposed rate hikes. Insurance regulators can force carriers to scale back reductions that are not justified, but if the rate increases are defendable due to higher costs, then these increases will push through.
How does this effect COBRA Administrators? Higher Marketplace Rates = Increase in COBRA Participation.
Well, it means that our clients will likely see an increase in COBRA participation because the rates and plans in the exchange may not be significantly lower than those offered through COBRA. For those administering COBRA, this will not change the timing of rate changes during open enrollment. but it means that the rate changes that are entered into your COBRA solution will likely be significantly higher as noted in rate change letters. Remember, with T-COBRAWEB COBRA software, a rate-change notice can be automatically generated at the time a rate-change is made.
Have an opinion on the future of COBRA & Marketplace plans? We'd love to talk to you further. Email us!