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Obamacare Premiums to Surge Next Year, Early Requests Show John Tozzi May 7, 2018, 3309 PM CDT

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May 7, 2018, 1304 PM CDT

Insurance companies want rate increases as high as 91 percent

Maryland regulator says the ACA market is in ‘a death spiralʼ

The first glimpse of what health-insurance companies plan to charge for

Obamacare plans next year suggests there s̓ no relief ahead for consumers

saddled with high premiums.

Several insurers in Maryland and Virginia are seeking double-digit

percentage increases in monthly costs for individual medical plans in 2019.

The largest increases are being sought by CareFirst, which wants to nearly

double the amount it charges on average for one coverage option in

Maryland, and raise the cost of another in Virginia by 64 percent.

Virginia and Maryland are the first states where 2019 rate requests have

been made public. Increases are anticipated across the U.S. as insurers

continue to grapple with the aftermath of last year s̓ battle to overturn the

Affordable Care Act.

Many health plans have stopped selling health coverage through the

exchanges created four years ago under Obamacare. The Republican-led

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attempt to overturn the health law last year caused premiums to surge, as

insurers expected that undoing the law s̓ requirement that all Americans

have health insurance would leave them with a smaller and sicker pool of

clients.

The repeal effort ultimately failed, but the Trump administration overturned

the penalty for going without insurance, and opened the door for insurers to

sell cheaper, skimpier plans.

The rate requests must be approved by regulators and may change. Health

plans will file requests in other states between now and late July. Final

premiums will have to be approved ahead of the open-enrollment period

beginning Nov. 1.

Seeking a Fix

In Maryland, CareFirst wants to raise rates by 91 percent on a plan covering

15,000 people, Insurance Commissioner Al Redmer Jr. said. If approved,

premiums for a 40-year-old could reach $1,334 a month.

“We have folks in Maryland that are struggling, that are trying to do the right

thing, and theyʼre paying more for their health insurance than they are for

their mortgage,” Redmer said on a call with reporters.

Maryland is seeking permission from the federal government to create a

reinsurance program that would use $975 million in state and federal funds

over five years to lower rates. That would help only temporarily, Redmer

said.

“I believe weʼve been in a death spiral for a year or two,” he said. A

permanent solution requires Congress to fix the Affordable Care Act, he

said.

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Rising Rates

Most insurers requested double-digit increases for ACA plans

Source: Company filings

Struggling Market

Virginia s̓ insurance market is struggling. In Charlottesville and some

neighboring counties, ACA policies are the most expensive in the nation for

people who donʼt get government subsidies. The cost of a mid-level plan

for a single 40-year-old is $1,048 a month.

Most buyers on the ACA exchanges receive subsidies that insulate them

from premium increases. For those who donʼt, the price of health insurance

is increasingly out of reach. Bloomberg News has been chronicling the

stories of the uninsured in a year-long project.

Carol Wise, a former nurse and social worker in Charlottesville who consults

for nonprofits, paid about $640 a month last year for an individual plan from

Anthem. When Anthem pulled out of her area, the only plan available,

insurer Optima Health Plan, had a premium of $1,800 a month.

“I was blown away,” said Wise, 62.

Wise opted instead to join a health-care sharing ministry for $280 a month,

though the arrangement doesnʼt offer the same protections as regular

coverage. She pays an extra charge because of her high blood pressure,

and has to consult monthly with a health coach.

The initial rates on offer arenʼt likely to lure customers like Wise back.

Group Hospitalization and Medical Services Inc., which operates as

CareFirst BlueCross BlueShield, wants to raise premiums by 64 percent, on

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average, compared with 2018 premium levels, according to documents filed

with Virginia regulators on May 4. The change would affect more than 4,000

customers.

“We are deeply concerned that individual rates must rise as steeply as

those filed, but this is needed to cover the cost of the population being

served -- which is generally far sicker than the average member in the

community,” CareFirst Chief Executive Officer Chet Burrell said in an

emailed statement.

The Kaiser Foundation Health Plan is seeking an average rate increase of 32

percent on about 79,000 members in Virginia, while Cigna asked regulators

to approve a 15 percent increase, projected to affect 103,000 members.

Optima, which some Virginians have criticized for highest-in-the-nation

premiums in some areas, said that on average its rates would decrease by 2

percent, and they would decline as much as 27 percent for some

customers.

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In Maryland, CareFirst s̓ larger HMO plan covering 123,000 people

requested a 19 percent increase. Kaiser is seeking a 37 percent hike. Both

would put the new rates for a 45-year-old above $500 a month, Maryland

officials said.

Anthem Inc., which pulled out of many markets this year, is requesting a 6

percent increase for its HealthKeepers-branded plans in areas of Virginia

where it remains.

Anthem declined to comment. Kaiser and Optima did not immediately

respond to requests for comment.

“Weʼre still sky-high, and we still have a lot of concerns about the rates,”

said Ian Dixon, a Charlottesville resident who has helped organize Virginians

to press the state and Optima for lower premiums. Even with a drop around

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30 percent, he said, Optima s̓ rates for 2019 would be about double what

premiums in the area were in 2017, when Anthem and other insurers were

still offering plans.

— With assistance by Hannah Recht

(Add CareFirst comment in 18th paragraph.)

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