The cost of premiums for plans sold on the state's health exchange will soar for 2018, adding to questions about the stability and affordability of the health insurance program known as Obamacare.
State regulators announced Tuesday that they have approved average rate increases of just over 23 percent to nearly 50 percent, depending on the plan and carrier, increases that surely will burden consumers who get no government subsidies but also potentially still leave insurers in the red.
"Rates for individual plans have gone up well over 100 percent in 4 years," said Chet Burrell, president and CEO of the state's dominant insurer, CareFirst BlueCross BlueShield. "It's the worst of all worlds now with very high premiums and at the same time carrier losses continue."
The two insurers that continue to offer coverage on the exchange — CareFirst and Kaiser Foundation Health Plan of the Mid-Atlantic States — have told the Maryland Insurance Administration that they have lost a combined $447 million since policies began selling under the Affordable Care Act in 2014.
About 243,000 Marylanders enrolled in health insurance plans through the exchange for 2017.
Calling the latest rate increases "disturbing," Al Redmer Jr., the state's insurance commissioner, said they will mean consumers will have to make difficult choices about what care they buy or don't buy.
"The losses incurred by carriers since the beginning of the Affordable Care Act are unsustainable, and premium increases that are the result of that are also unsustainable," he said. "So it's critical that folks in D.C. put aside their political differences and fix this thing. Otherwise, it will implode."
CareFirst, which has about 75 percent of the exchange market, made the highest requests — which company officials also acknowledged are not sustainable.
The carrier sought an average rate increase of about 50.4 percent for its HMO plans, and regulators will allow just under 34.5 percent. CareFirst requested an average rate increase of about 58.8 percent for its PPO plans, and regulators approved about 49.9 percent.
"We have reached the point where individual health care premium rates are too high to be readily affordable by the general public," said Burrell, who anticipates more healthy people dropping coverage. "The rapid rise in these premiums puts coverage out of reach for many — especially those who do not qualify for federal subsidies."
In Maryland, about 78 percent of enrollees qualify for premium subsidies and close to 56 percent get aid to lower the cost of out-of-pocket expenses, according to health exchange figures.
To review the CareFirst request, the insurance regulators used in-house experts and also contracted with an outside actuary.
The insurer drew particular ire from consumers, who filed dozens of comments online after the requests were made and protested in person at public hearings. The comments included words such as "unconscionable," "disgusting" and "staggering."
For Kaiser, insurance regulators plan to allow the insurer to raise rates an average of just over 22.6 percent, slightly less than the requested 23.4 percent.
"Kaiser Permanente is committed to maintaining affordable pricing in the Maryland Health Insurance Exchange," Kaiser said in a statement. "We look forward to introducing more Marylanders to our award-winning combination of care and coverage."
Kaiser has about 25 percent of the exchange market. Unlike CareFirst, which offers insurance statewide, Kaiser's services are limited to the metropolitan areas in the D.C. suburbs and Baltimore.
The number of carriers offering plans has dwindled to two from six in the first enrollment year of 2015 as insurers dropped out, citing high costs and lack of market share. Evergreen Health, a Baltimore-based co-op set up under Obamacare to offer plans on the exchange, was placed into receivership this summer by state insurance regulators after private investors backed out of a deal to acquire it and turn it into a for-profit insurer.
The approved monthly premium for the lowest cost "silver" plan for a hypothetical 40-year-old, non-smoker in the Baltimore region would be $373.48 for the Kaiser plan, $465.15 for CareFirst's HMO or $685.99 for CareFirst's PPO. Those premiums are before any subsidy is applied.
Advocates called the rate increases way too high.
"The state's decision will have devastating consequences for consumers and the long-term sustainability of the individual market," said Leni Preston, president of Consumer Health First. "We believe these rate increases are also inconsistent with CareFirst's statutorily mandated mission to provide affordable and accessible health insurance to its members."
Consumer Health First and another advocacy group Maryland Citizens' Health Initiative say Maryland leaders could consider some moves on its own, such as developing a reinsurance program for the most expensive enrollees or other means of reducing premium costs for everyone, requiring everyone buy insurance in the state or allowing more people to join the federal-state Medicaid program for low-income consumers.
"We would urge Governor Hogan and our elected officials to continue to look for further steps to stabilize the individual market, such as a state reinsurance program, and to require the commissioner to expressly consider CareFirst's statutory mission when reviewing rate filings in the future," said Beth Sammis, former acting commissioner of the insurance administration and a Consumer Health First board member.
Vincent DeMarco, president of the Maryland Citizens' Health Initiative, said shoring up Obamacare was crucial. The rate of uninsured in the state was nearly halved under the program, falling to 6.7 percent in 2015 from 12.9 percent in 2013, he said. That's coverage for hundreds of thousands of people, which has helped the state's health system and the economy generally, DeMarco said.
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"It's also important to remember that before the Affordable Care Act, a lot of people couldn't get access to health care at all," he said because of pre-existing conditions.
In approving insurance rates, the Maryland Insurance Administration considered the costs for enrollees who use a lot of health care, as well as how much the carriers take in and pay in claims, medical inflation and other costs.
Insurance regulators assumed that the Trump administration will continue to pay subsidies but that some people, particularly those who are healthy, just won't buy the more costly insurance with little fear of repercussions.
The deliberations over rates, which lasted months, were complicated in Maryland and around the country by the Trump administration, which threatened to cut off some of the subsidies and stop enforcing the mandate requiring people to buy coverage after Congress failed to repeal the health law.
The administration did shorten the open enrollment period, which in year's past extended unto the new year. This year, open enrollment will run from Nov. 1 to Dec. 15. The state exchange will support a call center to aid people in choosing a plan for next year and also will fund separate "navigator" groups.