Rates for insurance plans sold on Maryland’s health exchange will drop for a third year in a row, providing some relief to the tens of thousands of people who lost their jobs and insurance during the coronavirus pandemic and turned to the marketplace plans known as Obamacare.
State and insurance officials announced that the rates will drop about 12% beginning in January, after dropping more than 10% this year and more than 13% in 2019.
Michele Eberle, executive director of the Maryland Health Benefit Exchange, called it “rare around the country and a great benefit to Marylanders who buy their own health insurance.”
The rate declines will benefit those who renew or buy plans created under the Affordable Care Act through the exchange or directly from an insurer. They do not apply to those who get their insurance through their employer.
There currently are the 212,000 Marylanders with such plans.
About 70,000 people have signed up so far during a special enrollment period that began in March and continues to mid-December for those who lost their insurance along with their jobs during the pandemic. That included about 25,000 who bought private plans and an additional 45,000 who qualified for Medicaid, the federal-state health program for low-income people.
There are now about 1.15 million people enrolled in Medicaid in the state, up about 64,000 people from a year ago. People can enroll in the program year-round.
Open enrollment will begin in November for next year for the exchange plans. There will be plans from two returning carriers, CareFirst Blue Cross Blue Shield and Kaiser Permanente, and one entrant that left the market years ago, United Healthcare.
Average rates for the HMO from CareFirst, long the state’s dominant carrier, will drop almost 12% and the PPO rates will drop just over 17%. Both will be far lower than CareFirst initially proposed in May.
Kaiser asked for and was approved for a drop of about 11%. UHC’s HMO plan will be priced about 7.6% below its request.
State and insurance officials, as well as advocates, credited the declines in premiums to a state reinsurance program that helps insurers pay for their most expensive enrollees. It replaced a federal program ended by the Trump administration, which supports a Republican-led effort to scrap the entire health law. A case challenging the constitutionality of the Affordable Care Act brought by Republican attorneys general will be heard by the Supreme Court after Election Day in November.
State leaders say the three-year cumulative effect is a decrease of 31.4% for health insurance premiums on the exchange.
“While Washington continues to bicker back and forth about health care, we have delivered three consecutive years of lower premiums in Maryland,” Gov. Larry Hogan said in a statement. “Our innovative program to make health care more affordable continues to bring more stability and peace of mind to Marylanders, and serves as a model for the rest of the nation.”
The state General Assembly passed the reinsurance program in 2018 when rates were skyrocketing. Most people receive federal subsidies to buy plans, but the costs forced many of those who didn’t qualify for subsidies, and some insurers, from the market.
“Maryland’s innovative and bipartisan approach to stabilizing what had been a spiraling market has been incredibly successful, has benefited Marylanders, and become a blueprint for other states,” said Kathleen A. Birrane, Maryland insurance commissioner, in a statement.
Andrew Ratner, the exchange’s chief of staff, said officials there expect strong enrollment in the fall because of the lower rates and heightened concerns about the coronavirus. The plans all cover testing for COVID-19, the disease caused by the virus, as well as mental health and doctor visits.
Brian D. Pieninck, president and CEO of CareFirst, said the insurer worked with the Maryland Insurance Administration to “ensure health care coverage is more affordable” for state residents. He also said the carrier plans to monitor enrollment for 2021 after seeing the number of people who have signed up during the special enrollment period.
"There remains a great deal of uncertainty at this time due to a number of factors such as a possible second surge, the health of the economy and other factors which could impact 2021 enrollment,” Pieninck said.
Marisa Lavine, a spokeswoman for Kaiser, also acknowledged the pandemic in her statement: “We recognize that many people are facing difficult financial situations due to the ongoing pandemic and economic challenges. We are pleased to offer 11% lower premiums in Maryland for 2021, which is consistent with average lower premiums announced by Gov. Larry Hogan today.”
United Healthcare declined to comment.
Vincent DeMarco, president of the Maryland Citizens' Health Initiative, a health care advocacy group, said the pandemic makes the lower-cost coverage more important for residents.
“Several other states have followed Maryland’s lead on this and other recent health care successes,” he said. “Making health coverage affordable for Marylanders is more important than ever in the midst of the COVID-19 pandemic.”