Small employers in Washington state are facing double-digit increases in Medicare insurance rates for 2023, in some cases.
In most cases, small employers—defined by the state as those with 50 or fewer employees—are maintaining the largest premium increases in years.
Seattle-based Primera Blue Cross, which has one of the largest market shares in Washington state, posted the largest increase, at 11.64%.
Other rate increases in Eastern Washington include a 10.94% bump for Washington’s Kaiser Foundation Health Plan, a 9.74% bump for Health Alliance Northwest Health Plan, an 8.21% bump for Asuris Northwest Health, and a 5.75% bump for Regence BlueShield, among other carriers. .
Only one insurance company in Eastern Washington, the Aetna Life Insurance health plan, will lower its rates.
The average increase across the 11 carriers is 5.18%.
The new insurance rates were approved by the Washington State Office of the Insurance Commissioner and published on November 1, giving employers two months to shop around for different plans or absorb the increased costs.
It’s no surprise that prices are going up, said Nate Edmondson, vice president of Advanced Professional Insurance & Benefit Solutions, a wholesale industry advisor for Associated Industries based in Spokane.
However, the 2023 rate increases across most markets are the highest seen in several years.
“We’re finally seeing the effects of COVID play out. We know it’s affected people’s health,” Edmondson said.
Amanda Lansford, director of strategic communications for Primera Blue Cross, said the rate increase for small group plans is a reflection of the continuing rise in health care costs.
Lansford noted that over the past year, the carrier has seen significant cost increases coming from people who use their plan more frequently, and higher cost of hospital care.
“From our side, this increase really reflects increased cost and frequency utilization,” she said. “Hospitals are dealing with high administrative costs especially with manpower shortages and a significant increase in traveling nurses and labor in general.”
Many people stopped seeking care during the height of the pandemic, Lansford said, driving up demand for care and benefiting from the increased frequency of use last year.
She said the pause in care during a pandemic includes people not receiving care for larger issues like diabetes or cancer, which if not caught early can lead to more expensive care.
Edmonson said he’s heard the term “COVID long” used frequently by agents, brokers, and carriers.
Long-term COVID cases, or post-COVID cases, include a group of new, returning, or continuing health problems that people have after infection with the virus that causes COVID-19, according to the Centers for Disease Control and Prevention.
Edmundson said small group insurers submit a request for a rate increase or decrease in the spring that was approved or revised in October.
During that time, he works with carriers, brokers, and other professionals to understand the reasons for price changes and inform customers of potential changes.
“We try to gather as much information as possible to not only inform our customers but also to understand why things are so expensive,” he said.
“It’s often a simple proportion of how much (the carriers) pay in claims versus how much they receive in premiums.”
Edmonson said he gains as much information as possible to keep his customer base up to speed so there aren’t too many surprises when pricing is approved.
“Good or bad, we want to prepare people for what to expect in the new year as best as possible,” he said.
Edmondson said he encourages employers to measure their own healthcare coverage, compare prices, and switch to a different carrier if the plan is no longer something they can afford or need.
It also advises employers to ensure that they provide insurance options that meet the needs of their workforce.
He said “don’t pay more than you think you will use”. “If you don’t use it, you won’t get it again.”
The association is currently submitting several requests for quotes for the organization’s industry-specific health plan, said Stephanie Howe, director of marketing for Associated Industries based in Spokane.
She also said that the association’s health plan landing page is seeing twice as much traffic compared to the previous year.
“I think that speaks to the market demand for small business owners,” she said.
Howe said Associated Industries has 645 employers, about half of whom currently benefit from the union’s industry-specific health plan.
Specific industries eligible for the plan include construction services, manufacturing, healthcare, retail, and business services.
The association is an employers’ association focused on providing resources to small and medium-sized businesses, she said, but members are not always aware that the association sponsors a health plan.
However, I’ve noticed many members inquire about access to the association’s health plan, which is secured through Asuris Northwest Health.
“The value is really in that dental, medical, vision and disability package,” she said. “It’s really an introduction to make it more accessible and inclusive for small business owners.”
However, she noted that it’s important for employers to shop around because the package may not be right for everyone.