Early signs show health insurance companies are trying to exponentially raise prices for plans sold on the Affordable Care Act (ACA) marketplace — and for people who don’t qualify for federal assistance, there’s no relief in sight.
Insurers in Maryland and Virginia are asking for double-digit premium increases to 2019 monthly plans. CareFirst BlueCross BlueShield CEO Chet Burrell said that Maryland’s exchange is in the “advanced stages of a death spiral.”
Health experts warned this would happen. In fact, insurers who set the premium rates cautioned that costs would rise if lawmakers continued to undermine the Obamacare exchanges and not shore up the market. A letter issued to lawmakers in November from major health industry players said “[e]liminating the individual mandate by itself likely will result in a significant increase in premiums, which would in turn substantially increase the number of uninsured Americans.”
Now the public at large is learning what it meant for Congress to repeal the individual mandate, the tax penalty for not having insurance, and then not doing anything to improve a fragile market.
Instability — largely driven by Republican policy like the repeal of the mandate and the president’s decision to stop paying insurers for cost sharing subsidies — has irked insurance companies, but they’re mostly able to avoid serious harm. In 2017, for example, insurers still made money — Blue Cross Blue Shield had a $1.3 billion windfall — by raising premiums and enjoying the delay of an Obamacare tax, according to Axios.
People who need and buy health care on the exchanges — particularly those who don’t qualify for premium tax credits — are the ones actually hurt by these decisions. To qualify, they need to make between 100 and 400 percent of the poverty level.
Already, CareFirst BlueCross BlueShield is asking Maryland to approve a 19 percent increase on HMO plans, which are used by a majority of ACA enrollees statewide, and a whopping 91 percent increase on its PPO plans, which roughly 13,000 people use. The only other option is to purchase Kaiser Permanente plans, which requested a 37 percent increase on its HMO plans.
In Virginia, consumers have more options.
CareFirst asked for a 64 percent and 27 percent increase for its PPO and HMO plans, respectively. Kaiser requested a 32 percent bump; Virginia-based insurer Piedmont asked for an 18 percent increase; Cigna wants a 15 percent bump; and Anthem would like to increase plans by 6 percent. The only insurer to request a lower rate was Optima, who wants to lower prices by 2 percent.
These rates still need to be approved by state regulators.
A relatively small number of people purchase plans. In Maryland about 154,000 people buy health care on the market and in Virginia, roughly 400,00 people do. Even fewer people experience the full hike because subsidies protect them.
But there will be those who buy unsubsidized insurance. And they’ll likely have to either buy the ridiculously expensive plan, go without insurance, or purchase junk insurance.
The Trump administration said its “affordable alternative” to ACA health plans are cheaper but less comprehensive as a result. For example, they’ve endorsed permitting people to purchase short-term plans for 364 days, rather than the current three-month limit. A recent Kaiser Family Foundation study found none of these plans cover maternity health and barely cover addiction treatment.
On Tuesday, Sen. Lamar Alexander (R-TN), one of the lawmakers who tried to mitigate the blow, officially declared the one Obamacare fix bill that both parties could agree on as dead.
This isn’t all without consequence. After years of decline, the uninsured rate is ticking back up. According to new data published by Gallup and Sharecare Wednesday, the uninsured rate increased to 12.2 percent in 2017, compared to 10.9 percent at the end of 2016. The increase was especially significant in West Virginia, New Mexico, Iowa, and Hawaii, where the uninsured rate rose by at least 3 percentage points.
The uninsured rate is higher among Republicans than Democrats, noted Vox’s Sarah Kliff, meaning the people who elected Trump to office are faring worse.
This post has been updated with recent Gallup/Sharecare data on uninsured rates.