Some small employers in Washington state are facing double-digit increases in health insurance rates for 2023.
In most cases, those small employers, which the state defines as those with 50 employees or fewer, are absorbing the largest premium increases in years.
Seattle-based Premera Blue Cross, which holds one of the largest market shares in Washington State, saw the largest increase at 11.64%.
Other rate increases in East Washington include a 10.94% increase for the Kaiser Foundation Health Plan of Washington, a 9.74% increase for the Health Alliance Northwest Health Plan, an 8.21% increase for Asuris Northwest Health and a 5.75% increase for Regence BlueShield members.
Only one insurer in east Washington, health plan Aetna Life Insurance, will lower its rates.
The median increase for the 11 airlines is 5.18%.
The new insurance rates were approved by the Washington State Office of the Insurance Commissioner and released Nov. 1, giving employers two months to look for other plans or absorb increased costs.
Nate Edmondson, vice president for Advanced Professional Insurance & Benefit Solutions, a wholesale industry consultant at Spokane-based Associated Industries, said it was no surprise that rates were going up.
However, rate hikes for 2023 in most markets are the highest he has seen in several years.
“We are finally seeing the impact of COVID. We know it’s had an impact on people’s health,” Edmondson said. “Now these things are going to sleep as insurance carrier rates trend higher.”
Amanda Lansford, Premera Blue Cross strategic communications manager, said the price increase for small-group plans reflects ongoing increases in healthcare costs.
Lansford noted that the airline saw a significant increase in costs over the past year as a result of people using its plan more often and as the cost of care in hospitals increased.
“From our side, this increase really reflects increased costs and spectrum usage,” she said. “Hospitals are struggling with high administrative costs, particularly labor shortages, a proliferation of traveling nurses and the workforce in general.”
Lansford said that at the height of the pandemic, many people held back from seeking care, building demand for care and playing into the increased frequency of use over the past year.
She said the hiatus in care during the pandemic includes people not taking care of bigger problems like diabetes or cancer, which if not caught early can result in more costly care.
Edmonson said he’s heard the term “Long COVID” used more often by agents, brokers and shippers.
Long COVID or post-COVID states encompass a set of new, recurring, or ongoing health problems that people have after becoming infected with the virus that causes COVID-19, according to the Centers for Disease Control and Prevention.
Edmondson said small group insurance carriers submit a request for a rate increase or decrease in the spring, which will be approved or adjusted in October.
During this time, he works with carriers, brokers, and other professionals to understand the reasons for rate changes and to notify customers of potential changes.
“We’re trying to gather as much information as we can to not only educate our customers, but to understand why things cost more,” he said. “Often it’s a simple ratio of how much (hauliers) pay out in claims and how much they get in premiums.”
Edmonson said it acquires as much information as it needs to keep its customer base up to date so there aren’t many surprises when tariffs are approved.
“For better or worse, we want to prepare people as best we can for what awaits them in the new year,” he said.
Edmondson said he encourages employers to compare their health plans, compare rates and switch airlines when a plan is no longer something they can afford or need.
He also advises employers to ensure they offer insurance options that meet the needs of their employees.
“Don’t pay for more than you think you’ll use,” he said. “If you don’t use it, you won’t get it back.”
Stefanie Howe, marketing director for Spokane-based Associated Industries, said the association is currently processing many requests for rate quotes for the organization’s industry-specific healthcare plan.
She also said the association’s health plan landing page saw twice as many hits as compared to last year.
“I think it speaks to the market demand for small employers,” she said.
Howe said Associated Industries has 645 employer members, about half of whom currently access the association’s industry-specific health plan.
Specific industries that qualify for the plan include construction, manufacturing, healthcare, retail, and business services.
She said the association is an employers’ association focused on providing resources to small and medium-sized businesses, but members are not always aware that the association sponsors a healthcare plan.
However, she has noted that many members have inquired about access to the association’s healthcare plan, which is managed by Asuris Northwest Health.
“The value really is in that bundle of dental, medical, visual and disability,” she said. “It’s really about offering it to make it more accessible and inclusive for small employers.”
However, she noted that it’s important for employers to shop around, as the package may not be right for everyone.