Most people who buy their health insurance through the Maryland’s exchange could see premiums drop next year, based on rate requests from the state’s two carriers filed Friday, marking what could be the second year in a row of declines.
Premiums for the so-called Obamacare plans have been skyrocketing around the country, and state regulators, carriers and advocates say action taken by the Maryland General Assembly and Gov. Larry Hogan made the difference for close to 200,000 Marylanders who tap the Affordable Care Act program because they don’t receive insurance through their jobs.
“The initial indication is that the reinsurance program created last year by the legislature and the governor had its intended effect and we’re seeing added stability in the market because of it,” said Al Redmer Jr., state insurance commissioner.
Hogan, a Republican, worked with the Democratic-led legislature earlier this year to extend a tax initiated last year on insurance carriers that Congress had eliminated at the federal level. The tax funds a pool of money that helps insurance companies cover their most expensive claims.
The Maryland Insurance Administration still must review the rate requests and determine if they need to be raised or lowered to reflect the cost of coverage. Final premiums will be determined by mid-September. A public hearing is planned for July.
The two insurers remaining on the state’s exchange are CareFirst BlueCross BlueShield, which is by far the dominant carrier, and Kaiser Permanente.
CareFirst requested a 8.9% decrease in rates for its HMO plan, which covers more than half the people who have exchange coverage this year, more than 112,000 people. The carrier asked for a 9.1% increase on its PPO plans, which now cover just under 12,000 people. Kaiser, which covers more than 78,000, sought a 3.9% increase for its HMO.
Brian D. Pieninck, CareFirst’s president and CEO, said the steps taken by state officials to stabilize the market were welcomed, but he noted in a statement that the reinsurance pool is only a temporary fix.
“These proposed rates generally represent positive progress and good news for many Marylanders,” he said. “Because the reinsurance program ends in 2023, we look forward to working with the governor, elected officials, insurers, regulators, hospitals and others to identify lasting solutions that reduce the cost of care and help make coverage truly affordable.”
Kaiser Permanente said in a statement that the proposed rates reflect the carrier’s costs.
“Kaiser Permanente’s proposed 2020 individual and family plan rates represent our efforts to ensure we can sustain and deliver high-quality health care for all our members over the long term,” it said.
If the rates are approved, monthly premiums for a 40-year-old non-smoker in the Baltimore metro area who buys the lowest-cost silver plan, which is a mid-priced plan, would be $364 with a $2,250 deductible on the CareFirst HMO, $693 with a $3,000 deductible on the CareFirst PPO and $366 with $6,000 deductible on the Kaiser plan.
The majority of consumers receive federal subsidies to buy their insurance on the exchange, reducing what they actually pay in premiums.
"Although these are just proposed rates, it's exciting that consumers will continue to see around the same or even a decrease in rates for the 2020 plan year," says Michele Eberle, executive director of Maryland Health Benefit Exchange. "Affordability is a big concern for all Marylanders when making a choice about health coverage."
Beth Sammis, president of the advocacy group Consumer Health First, called the rate requests good news for consumers next year.
She said the group would monitor the rate review process to ensure the insurance carriers accurately accounted for the full value of the reinsurance program in their proposed rates.
The group also will look for other ways to sign up more people — about 6 percent of Maryland residents remain uninsured — and make insurance more affordable. One possibility she suggested was allowing the general public to access a public Medicaid plan.
“The reinsurance program has demonstrated it is possible to stabilize and grow this market,” she said. “As we move forward, Consumer Health First will press policymakers to consider other opportunities for keeping the individual market stable and vibrant once the reinsurance program ends in 2023. We see the most hope in a public option through a Medicaid buy-in program.”
More than 200,000 Marylanders were able to sign up for Medicaid, the federal-state health program for low-income residents, which was expanded in the state under the federal health law.
Meanwhile, the four insurance carriers offering plans for small business coverage requested rate increases next year averaging 4.3 percent. Almost 268,000 workers in the state get their insurance through this market.
Such rate requests can change quarterly and some employers contribute to their employees’ premiums. The requested rate increases ranged from a 15.5 percent increase on Aetna’s HMO plan to a 0.6 percent increase on CareFirst’s HMO plan.