Big questions and big rate hikes persist ahead of final exchange rate-filing deadline
While all eyes were on Republican senators this month as they launched a last-ditch effort to repeal and replace the Affordable Care Act by a simple majority, the deadline for health insurers to lock in their 2018 rates in the individual insurance exchanges slowly approached.
That deadline arrives Wednesday, when insurers must sign contracts to sell coverage in the ACA marketplace next year without knowing whether the Trump administration will continue paying subsidies that help lower the cost of coverage for low-income Americans or whether the administration will keep enforcing the individual mandate that requires most people to buy insurance.
That uncertainty has led most health insurers to increase the rates on which premiums are based. Many insurers have also scaled back their participation in the exchanges, leaving large swaths of the nation with just one or two health plans. At this point, however, no U.S. counties are projected to be without insurers on the marketplace in 2018.
The upcoming fifth open-enrollment period kicking off on Nov. 1 will be one of the most challenging thanks to the big rate hikes, dwindling consumer choice, a shortened enrollment period and reduced federal funding for marketing and outreach, insurance experts say. Funding for ACA navigators has also been slashed, and HHS said last week that HealthCare.gov will go offline for 12 hours nearly every Sunday of open enrollment.
"There's no question that enrollment is going to shrink," said Sabrina Corlette, a research professor at Georgetown University's Center on Health Insurance Reforms. "It's a perfect storm of factors when you have the political leadership saying this (marketplace) is collapsing, it's dying. How many people out there think the law's already been repealed?"
Most insurers filed their initial 2018 rate requests in May and June, and many state insurance departments are beginning to release the approved rates, which are high in many markets partly due to uncertainty over whether the cost-sharing reductions will be paid. The rate hikes are no surprise, as insurers have warned for months that rates would go up without a guarantee from the Trump administration.
Average approved rates vary across states, but many are in the double digits. Virginia's Bureau of Insurance, for instance, approved an average rate increase of 55.3% for 2018 on-exchange plans. In that state, Optima Health Plan was approved for an average rate increase of 81.8%. The lowest average approved rate increase was 24.2% for Kaiser Foundation Health Plan.
In Connecticut, where just two insurers plan to sell marketplace plans, rates are set to rise by 29.7% on average. The state's insurance regulators approved a rate increase of 31.7% for Anthem, slightly lower than the insurer's average rate request of 33.8%. It approved a 27.7% hike for ConnectiCare, higher than the insurer's request of 17.5%
In a statement, the Connecticut Insurance Department said the approved rate increases would have been lower if the Trump administration had guaranteed funding for cost-sharing subsidies: 24.7% for Anthem and 16.8% for ConnectiCare.
In Tennessee, where many counties were at risk of having no insurance options early this summer, national insurer Cigna's individual insurance rates will jump 36.5% on average next year. Blue Cross and Blue Shield of Tennessee's rates will rise an average 21.4%. Oscar Health will also enter the state next year.
Most people—about 84%—who buy coverage on the exchanges receive federal premium tax credits and are protected from these large premium hikes. Unsubsidized enrollees will feel the brunt of the increases.
Less than 10% of people buy coverage in the individual market. The majority of Americans, or more than 150 million, get coverage from an employer, and job-based premiums are relatively stable.
Tennessee Insurance Commissioner Julie Mix McPeak blamed the high rates on congressional leaders' failure to pass measures to stabilize the insurance market. While Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) earlier this month launched a bipartisan effort to shore up the exchanges, those talks fell apart last week.
Republicans then turned their sights on passing another ACA repeal bill from Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.) before Sept. 30, when their authority to pass it through a budget reconciliation process with a simple majority will expire. That effort failed on Wednesday, when the senators pulled the bill because they lacked enough votes to pass it.
Experts say the focus should now turn back to stabilizing the individual market and getting ready for the open-enrollment period, which lasts just 45 days this year, down from three months in prior years. But it may be too late to pass measures that keep rates down. After the Sept. 27 federal deadline, rates are locked in, regardless of whether the Trump administration later decides to pay the cost-sharing subsidies.
"There are no midyear rate changes allowed, either up or down," Corlette explained.
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