The Maryland Insurance Administration will hold a public hearing Monday to consider new premium rate hikes proposed by health insurance companies in response to the Trump Administration’s decision to eliminate subsidies that help low-income people pay out-of-pocket expenses.
CareFirst BlueCross BlueShield and Kaiser Permanente of the Mid-Atlantic States have requested permission to further increase rates on individual plans sold under Obamacare before enrollment opens on Nov. 1.
The insurance administration already approved rate hikes for both insurers in August, but will consider lifting them even more after the decision to stop paying the subsidies changed the playing field.
The rate hikes would vary by what type of plan a consumer has, but some could see increases as high as 86.1 percent if the administration approve the company’s requests. The regulatory agency typically doesn’t approve the exact requests.
CareFirst consumers who faced rate hikes of 31.4 percent to 52.1 percent, on average, in August now could face increases of 52.3 percent to 86.1 percent, according to the insurance administration.
Kaiser customers who faced hikes of around 22.6 percent, on average, now face possible hikes of 30.8 percent to 33.3 percent.
The insurers have said they need to raise the premiums they charge for insurance to replace the money they would have received from the federal government. The subsidies, known as cost sharing reductions, were paid to insurers to help cover co-payments, coinsurance and deductibles for low-income individuals and families.
Officials with CareFirst and Kaiser were not available for comment, but issued statements instead.
CareFirst has asked that the premium increases only apply to those who qualify for the subsidies that Trump cut. That is because the same people would likely qualify for tax credits that help cover premiums. These tax credits likely would rise as premiums rise.
“As a result of the federal decision to stop funding cost share reductions, we have filed adjusted premium rates with the Maryland Insurance Administration that reflect this loss of funding,” CareFirst officials said in a written statement. “This will affect only those individuals who qualify for cost share reduction subsidies, but we are hopeful (and expect) that these same individuals will receive higher premium tax credits that will ease this unfortunate and unnecessary higher burden.”
Insurance commissioner Al Redmer, Jr. said that is one of the issues the administration will explore — whether to spread the rate increases to everyone, or restrict them to specific plans. People who get the cost sharing reductions have to enroll in silver plans, middle of the road plans with moderate premiums and costs.
Kaiser also refiled proposed rates for 2018.
“The revised rates reflect our assumed true costs of care for these members,” Kaiser regional president Kim Horn said in a statement. “Kaiser Permanente remains committed to striving for affordability, providing access to care for individuals and families, and participating in the Maryland Health Insurance Exchange.”
Those potentially facing the highest premium increases are the 2,814 people who enrolled in the CareFirst PPO silver plan through the exchange. The insurance administration initially approved a 52.1 percent increase for those plans in August and now CareFirst is asking for an 86.1 percent increase.
The majority of CareFirst Obamacare customers are in its HMO plans. CareFirst is asking to increase their rates by 52.3 percent. They were granted a 34.5 percent increase in August.
The insurance administration is working under tight time constraints. It must decide on the rate increases in time for open enrollment, which begins Nov. 1.
Redmer said the administration has a legal obligation to make sure the insurers generate enough revenue from their plan premiums to sustain their businesses. But the rates also can’t be discriminatory or excessively expensive. The requests will be scrutinized closely despite the short time frame, he said.
“We are looking at every line item and we don’t want our consumers to pay a dime more than is actuarially required,” Redmer said.
Leni Preston, president of Consumer Health First, said that further raising the rates goes against the purpose of Obamacare.
“Clearly, this is counterproductive when you are trying to ensure affordable insurance coverage for individuals and at the same time you are destabilizing the individual market,” Preston said. “Neither is conducive to good health.”