A Few Health Insurers to Cut Rates in 2015

An insurer in Washington state selling plans under the Affordable Care Act is proposing to lower customers" health premiums next year in what appears to be one of the first such decreases proposed for 2015.

The proposal by Molina Healthcare Inc. was part of a batch of state rate filings released Monday that included Washington and Indiana.

While most carriers are seeking increases, Molina's filing signals that insurers that priced cautiously for 2014 could face pressure to be more competitive in the second full year of the law's insurance marketplaces.

Molina proposed a decrease averaging 6.8% for Washington customers for 2015. It told state regulators in its rate filing that it was betting that people signing up through the insurance exchange were in better health than the carrier previously thought, and that it anticipated new entrants when the law's penalties for not carrying coverage grow next year.

Molina, a company that historically has focused on managed Medicaid plans, offered some of the most expensive premiums among insurers selling on the Washington exchange in this year. It said it had only about 1,200 members in 2014.

Ben Lynam, vice president for Molina's actuarial pricing, said in an interview that the company had made conservative assumptions for 2014 about the medical claims likely to be incurred by its enrollees, in part because it hadn't had much previous commercial experience.

"With hindsight and looking at what's going on across the country...we've improved those assumptions and lowered our rates in 2015," he said.

In Washington, filings available Monday included proposed increases ranging from 0.57% from Kaiser Foundation Health Plan of the Northwest to an 11.2% boost by Group Health Cooperative, which had some of the lowest rates in the state for 2014.

Insurers have said they faced considerable uncertainty about the law's impact heading into 2014, and over time, plans with prices that are both high and low outliers are expected to move toward the middle.

At least two new carriers also appeared to have filed paperwork to participate in the insurance exchange in Washington next year, including United HealthCare, which had decided to sit out exchanges in many states this year.

Kaiser, Group Health and United HealthCare didn't immediately respond to requests for comment.

Washington is one of the 14 states running its own insurance exchanges, and has had few of the technical problems encountered by many other states.

Washington officials said they hit their first-year enrollment targets, although data suggest that only about 26% of those signing up were among the coveted 18-to-34-year old demographic.

In Indiana, Anthem Insurance Cos., a unit of WellPoint Inc., proposed an average rate increase of 9.65% for about 29,000 enrollees.

The premium proposals are subject to approval by the state regulator and could change.

Write to Louise Radnofsky at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires