People in Maryland who do not get their health insurance through work and buy coverage on the state’s exchange will get a break in rates for a second year in a row after years of massive increases, Gov. Larry Hogan announced Thursday.
State regulators lowered the rates for 2020 even more than carriers had requested. The new premiums will affect about 200,000 Marylanders who buy exchange plans, known as Obamacare.
More than 200,000 people also have qualified for an expansion of Medicaid, the government insurance for low-income people, under the Affordable Care Act, helping cut the number of uninsured people in the state in half to about 6 percent.
“By addressing this crisis head-on, we have gone from an individual market on the brink of collapse to two straight years of lower premiums for Marylanders,” Hogan said in a statement. “Last year, after we refused to accept Washington’s failure to act, we came together to deliver lower rates for the first time in more than a decade. Our innovative program to make healthcare more affordable for Marylanders serves as a model for the rest of the nation.”
The insurance, known as Obamacare, has been a hot political issue since the law was passed in 2010 and promises to be a key issue in the 2020 presidential election, in no small part because the program’s rates skyrocketed, making it unaffordable for many.
The law also guarantees some benefits to those who have coverage through work and on the exchange, such as free preventive screenings, the ability to insure children up to age 26, elimination of lifetime caps and a ban on exclusions for preexisting conditions.
Critics had said changes made by the Trump administration and GOP leaders in Congress had undermined the law and contributed to those rising costs. Hogan, a Republican, worked with the Democrat-led General Assembly earlier this year to extend a fix initiated last year that is credited with lowering the state’s rates.
That fix was a reinsurance program that placed a tax on insurance carriers eliminated at the federal level that created a pool of money to help insurers to cover their most expensive claims.
Insurance officials say the move has helped push down premiums, which has helped lure more people to buy insurance and increase the insurance pool. It also has begun to attract younger, healthier people, who, in turn, helped push rates down even further.
Two insurers remain on the state’s exchange: CareFirst BlueCross BlueShield, which is by far the dominant carrier, and Kaiser Permanente.
Under the rates released Thursday, those who buy CareFirst’s HMO plan, which covers about 108,300 people, or more than half of people on the exchange this year, would see a decrease in premiums of 14.7%. Rates for CareFirst’s PPO plan that covers about 11,500 people would drop by 1.45%.
The cost of Kaiser’s plan, which covers about 70,600, would drop by 5%.
The premiums for small-business plans, used by close to 270,000 Marylanders, increased by an overall 3%, less than the 4.3% increase requested by carriers, the state reported. The changes in premiums ranged from no increase in a UnitedHealthcare HMO plan to a 10.2 percent increase in Kaiser HMO plan.
The state does not regulate health plans for large employers who self-insure their employees.
“After years of devastating rate increases, it is certainly gratifying to see our individual market begin to stabilize,” said Al Redmer Jr., Maryland’s insurance commissioner, in a statement. “We are hopeful that those Marylanders that continue to go uninsured will investigate the benefits and federal subsidies that may be available to them.”
Redmer added in an interview that the insurance officials worked with the carriers to further reduce the premiums, which after two years, will be overall 22% lower than in 2018.
Further, he noted the majority of consumers receive federal subsidies to buy their insurance on the exchange, reducing what they actually pay in premiums.
Other measures have been proposed by advocates, and now presidential candidates, that include a so-called public option, in which people could buy into Medicaid or some type of Medicare-for-all plan that would move the country toward government insurance rather than private coverage.
The enrollment period for marylandhealthconnection.com opens Nov. 1, and plans in Maryland will also offer new options such as lower deductibles, the sometimes costly out-of-pocket payments users have to make before insurance kicks in, said Michele Eberle, executive director of the Maryland Health Benefit Exchange, which oversees the online marketplace.
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She also said the work of the governor and legislature helped boost participating in health insurance, which has dropped nationwide as costs grew and federal penalties for going uninsured were lifted. Enrollment this year was up 2% over 2018. Maryland’s uninsured rate dipped slightly this year to 6% from 6.1%, while the federal uninsured rate grew to 8.5% from 7.9%.
“Maryland was one of only about one-quarter of all states to experience growth on its exchange in 2019,” she said. “And it was also one of the few states to see a continued drop in its uninsured rate. ... About 94 percent of Marylanders have health coverage and greater access to care.”
Brian D. Pieninck, CareFirst President & CEO, also said in a statement that the rates were “a positive step toward making health insurance more affordable for Marylanders.”
He said the insurer appreciated the work done to fund a reinsurance program but “more work is necessary and lasting solutions are required to reduce the total cost of care for all Marylanders. ... We look forward to working with consumers, Gov. Hogan, elected officials, industry regulators, and providers to identify ways to sustain this progress and make coverage accessible and truly affordable to all into the future."
Kaiser did not respond to a request for comment.
Consumer advocate Leni Preston also said the 2020 rates were “a win" for Marylanders.
“I’m very impressed by what the insurance commissioner did in bringing down the rates even further than what the insurance carriers were calling for,” she said. “This shows the reinsurance program is working. And this is good news for the stabilization of the individual market in Maryland.”