Maryland insurance regulators said Monday they were working to minimize the pain from last-minute rate increases for those buying plans sold under the Affordable Care Act by limiting the increases to certain consumers.
The proposed rate hikes became necessary last week when the Trump administration announced it would no longer pay a subsidy that insurers rely on to offset the out-of-pocket costs for some low-income consumers. The decision set off a scramble to figure out how to shore up insurance companies, which had already reported millions in losses on so-called Obamacare plans sold to individuals.
"Most of us would prefer not to be here; it's yet another pubic hearing dealing with 2018 rates for the Affordable Care Act," Al Redmer Jr., the state's insurance commissioner, said in opening remarks at a hearing on the new rates requested by insurance companies. The hearing occurred nine days before the start of the 30-day open enrollment period that begins Nov. 1.
Redmer said no one wanted to further raise rates, which were already set to go up by double digits on average for next year. He said the newest round of increases would apply only to a slice of the market that buys so-called silver plans, a mid-priced policy that those who receive the subsidies are required to buy. The increased rates would apply only to those who buy plans through the exchange, a state-run insurance marketplace created under the Affordable Care Act. Consumers who do not receive subsidies could sidestep the additional cost by buying directly from an insurance company or avoiding silver plans.
The insurance regulators noted that the majority of consumers who face higher rates receive a separate subsidy to offset the cost of premiums. If their premiums rise, these subsidies will also rise, limiting the pinch for them.
There are about 210,000 people who buy individual plans under Obamacare in Maryland, and about 96,000 of them have silver plans.
About 20 percent of those with silver plans purchased on the exchange get no out-of-pocket subsidies, known as cost sharing reduction payments. Todd Switzer, the insurance administration's chief actuary, said he believed most would buy plans directly from insurers or switch to cheaper bronze plans or more expensive gold plans to avoid the additional rate increase.
There are two insurers offering insurance in Maryland in 2018: CareFirst BlueCross BlueShield and Kaiser Permanente. CareFirst proposed an average rate increase for its silver HMO and PPO plans of 60.1 percent and 86.1 percent, respectively, far higher than the rates already approved. Kaiser asked for an average rate hike for its silver HMO plans of 33.3 percent, also significantly higher than what has already been approved.
The effort to limit the increases was supported by healthcare advocates and a small number of people who came to testify at the hearing Monday, including a couple of self-employed professionals who do not receive any subsidies but still want to buy health insurance on the exchange. The group included a salesman, a father whose daughter requires expensive medications to control seizures, and a consultant.
Adrienne Ellis, a health policy consultant, bought a silver plan this year and will avoid the additional rate increase by buying a different plan next year or buying directly from an insurer.
"I'm in the bucket where I would have to pay," said Ellis, who until recently served on the board of the advocacy group Consumer Health First. "Now I can go buy a gold plan and maybe enjoy more benefits."
The commission is required to meet the needs of insurers without unduly burdening consumers and has sought an outside counsel to help it decide on the eventual rates in coming days.