States Approve Premium Hikes after Loss of Cost Sharing Reductions
State insurance offices have started to approve premium hikes for 2018 individual and small group plans following Trump’s cost sharing reduction cuts.
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By - Several states have decided to either increase or maintain expected premium increases on individual and small group plans following the President’s decision to end the cost-sharing reductions (CSRs) that cover the cost of many Affordable Care Act marketplace enrollees.
In recent months, state insurance commissions and payers have adjusted and approved individual premium rates based possible cuts to the CSRs. The President's threats to cut the subsidies caused agencies to prepare well in advance of the 2018 deadline, and even led CMS to give payers more time to file their 2018 plan rates.
The Congressional Budget Office released an estimate earlier this year saying that silver-tier individual premiums will rise on average by 20 percent in 2018, and grow by 25 percent by the year 2025.
Many state insurance commissioners have expressed their dissatisfaction for the CSR cuts while still approving higher prices.
PA approves 30.5 percent premium increase on individual plans
Acting Insurance Commissioner Jessica Altman approved premium increases of 30.5 percent on individual health plans, the PA insurance office said in a public announcement.
READ MORE: The Progress and Challenges of the Affordable Care Act
The state’s insurance office added that keeping the CSRs in place would only increase premiums by 7.7 percent, the Insurance Office said.
“It is with great regret that I must announce approved rates that are substantially higher than what companies initially requested, “Altman said.
“This is not the situation I hoped we would be in, but due to President Trump’s refusal to make cost-sharing reduction payments for 2018, and Congress’s inaction to appropriate funds, it is the reality that state regulators must face and the reason rate increases will be higher than they should be across the country.”
To help consumers determine what plans are the most reasonable to purchase, the state is offering a price comparison tool for both on- and off-exchange individual insurance plans.
The tool will allow consumers to determine if they qualify for certain individual subsides, and their expected premiums. Altman said that her office will help consumers understand what benefits, protections, and assistance certain individuals are still entitled to under the ACA.
READ MORE: Trump Plans to End Cost Sharing Reduction Subsidies for Payers
“I strongly encourage all Pennsylvanians who need coverage to use our plan comparison tool to find the best plan for them and protect their and their family’s health by enrolling in coverage for 2018,” Altman said.
NH prepares in-state insurers for expected premium increases
NH Insurance Commissioner Robert Sevigny and Governor Chris Sununu said that payers have already adjusted their 2018 individual rates by expecting CSRs to end, the office announced in a press release.
Premiums are expected to increase by a median of 43 percent, said the state. While Sevigny saw the benefits of maintaining the CSRs, the state had the foresight to expect large commercial payers to hike their premiums and allowed them to do so.
“I had hoped that the federal government would not cease these payments to insurers, an act that could create further instability in individual health insurance markets across the country,” Sevigny said. “However, New Hampshire prepared for such a contingency by allowing insurers to file rates that assumed these payments would not be made.”
“All three insurers who will offer plans in 2018 – Ambetter, Anthem, and Harvard Pilgrim – filed rates with this assumption and so this announcement will not create a further change,” Sevigny added.
WA state insurance office increases premiums to protect in-state market stability
READ MORE: Payers Express Concern Following Cost-Sharing Reduction Cuts
Washington State Insurance Commissioner Robert Kreidler approved premium rate increases ranging from 9 to 27 percent on individual health plans, according to a public statement from his office.
Kreidler issued a letter to payers within the state, saying that he approves language on silver individual plan applications tailored to the current CSR cuts. The CSR cuts left Kreidler with no choice but to increase silver plan premiums because a lack of CSR funds would destabilize the individual market, he said.
“President Trump’s devastating refusal to pay federal funding that helps people afford health insurance leaves me no choice but to reluctantly allow health insurers to charge higher premiums for 2018,” Kreidler said. “Not allowing the higher rates would cause further instability in our market.”
Kreidler also suggested that the President’s decision will also decrease health plan affordability for many individuals who seek individual coverage.
“Although many people who buy policies through our state’s exchange, Washington Healthplanfinder, will still receive subsidies, others will see much higher premiums,” Kreidler said.
CA cites 12.4% increase on individual plans; will sue Trump administration with other states
CA Insurance Commissioner Dave Jones said silver individual plans, the state’s most commonly purchased coverage option, will see premium increases of 12.4 percent.
The Commissioner added that ending the CSRs will drive out payers that offer the plans and will continue to destabilize the state’s insurance markets.
“Health insurance policies were issued and premiums were set with the reasonable expectation that the President and Congress would follow the law and appropriate the funds required by the Affordable Care Act,” Jones said. “Trump's action will immediately destabilize the health insurance market, on which millions of Americans rely for their health care coverage.”
California is among several states that have already started the process of suing the Trump Administration for its decision.
