QualChoice is requesting that the Arkansas Insurance Department approve an average rate increase of 54.4% for its individual health insurance plans for 2026, while Arkansas Blue Cross & Blue Shield has requested individual increases averaging 23.3%.
Other insurers also are requesting large rate increases.
Under Arkansas law, the state insurance commissioner, Alan McClain, cannot approve proposed rate increases that he determines are not actuarially sound or are excessive, inadequate, or unfairly discriminatory.
The department must approve the increases and submit the rates to the Centers for Medicare and Medicaid Services by Aug. 13. Final rates must be published by Nov. 1 in time for the federal Health Insurance Marketplace’s open enrollment period.
Gov. Sarah Sanders reacted to the rate increase requests in a press release by saying, “Arkansans are tired of getting outrageous bills from multi-billion-dollar insurance companies, and my administration will not allow them to take advantage of our people. Nothing justifies year-over-year premium increases of this scale – it’s wrong and prohibited under Arkansas law.
“Arkansas’ Insurance Commissioner is required to disapprove of proposed rate increases if they are excessive or discriminatory, and these are both. I’m calling on my Commissioner to follow the law, reject these insane rate increases, and protect Arkansans.”
The rate requests apply to two different plans that comply with the Affordable Care Act: on-market plans, which are subsidized, and off-market, which are not. The state’s ARHOME program involves only on-market plans. Both involve the same overall population in the same risk pool.
Of the six health insurers offering individual plans, QualChoice Life and Health Insurance Company had the highest request at 54.4%. It covers 40,415 affected lives.
According to the rate filing, most of the rate increase – 37.6% of the 54.4% total filed increase – is due to morbidity, risk adjustment and dispensing fee changes. Other factors include medical utilization changes, medical price changes, and changes to administration costs.
The state’s largest insurer, USAble Mutual Insurance Co., which does business as Arkansas Blue Cross & Blue Shield, requested a 23.3% increase to cover 107,712 lives.
Other insurers’ requests were as follows:
– QCA Health Plan seeks a 54.2% increase to cover 52,505 affected lives.
– Celtic Insurance Company, otherwise known as Ambetter, seeks a 42.5% increase to cover 85,093 lives.
– USAble HMO seeks a 25.5% average rate increase to cover 39,697 affected lives.
– HMO Partners, Inc., which does business as Health Advantage, requested a 20.23% increase for its 28,447 affected lives.
Five insurers requested much smaller increases for small group off-market plans. Those included the following:
– Arkansas Blue Cross and Blue Shield: 7.5% for 43,830 affected lives.
– QualChoice Life and Health Insurance Company: 13.06% for 4,104 affected lives.
– QCA Health Plan, Inc.: 12.88% for 6,054 affected lives.
– United Healthcare Insurance Company: 0.1% for 711 affected lives.
– United Healthcare Insurance Company of the River Valley: -0.08% for 3,781 affected lives.
The department approved average rate hikes of 6.2% for individual market plans and 10.2% for small group plans for 2025, according to the Arkansas Center for Health Improvement (ACHI).
Jennifer Wessel, ACHI interim health policy director, said one factor is the likely end of enhanced premium tax credits when the federal fiscal year ends Sept. 30. These have provided tax credits for insurance purchases for individuals making above 400% of the federal poverty line.
The change means some healthy individuals probably will leave the insurance market, hurting the risk pool.
Wessel said rising insurance costs are nothing new.
“I think costs in health care across the board are increasing, and I think we’re only going to see it to continually increase based on some of the current policy,” she said.
Arkansas Blue Cross and Blue Shield responded to criticism of the rate increases in a statement released Wednesday (Aug. 6).
“Based on individual market filings nationally, Arkansas Blue Cross and Blue Shield’s request is consistent with what other insurers are requesting. We want to assure Arkansans that we don’t take proposed rate increases lightly. As an Arkansas-based, not-for-profit mutual insurance company, we agree that the cost of healthcare is becoming unaffordable for families and businesses. Health insurance costs, however, are driven by the cost and use of healthcare services. In the last several years, we have seen substantial increases in the cost of hospitalizations, outpatient surgeries, prescription drugs, and overall utilization,” the company’s statement read.