Insurers’ requests for premium increases in 2018 varied widely amid uncertainty surrounding how the Trump administration will implement ObamaCare, a new analysis finds.
The Kaiser Family Foundation analyzed initial premium requests from 21 major cities, and found the rate requests ran the gamut from a 5 percent decrease in Providence, R.I., to a 49 percent increase in Wilmington, Del.
Some areas saw more modest increases or virtually no change.
Premiums generally wind up being similar or equal to insurers’ initial requests, but this year is different. It’s quite possible the rates could change, the analysis noted, as insurers still lack certainty about whether the federal government will continue critical payments to insurance companies or enforce the penalty for going without health coverage.
“We still would have seen premium increases in many of these states even without the political uncertainty,” said Cynthia Cox, a co-author of the analysis and associate director for Kaiser’s Program for the Study of Health Reform and Private Insurance.
“But if the Trump administration had been more clear about what the rules were going to be for next year, we would likely have seen much smaller premium increases,” she said.
The insurance plans took different approaches to crafting their rate requests. Some factored in the uncertain environment. Some states asked insurers to file two sets of rates, with the second including a big increase if the federal government discontinued critical payments to insurance companies.
“The vast majority of insurers included in this analysis cite uncertainty surrounding the individual mandate and/or cost sharing subsidies as a factor in their 2018 rates filings,” the new report states.
Insurers factoring in the possibility that the administration will not enforce ObamaCare’s individual mandate increased their rates an additional 1.2 to 20 percent. For those requests that factored in a discontinuation of key payments to insurers, insurers increased their initial rates another 2 to 23 percent, according to the report.
Even if premiums rise, many lower income enrollees would be cushioned from the spike. About 84 percent of those who get coverage in the exchanges receive tax credits from the federal government to help pay for health insurance, and that assistance rises when premiums do.
Key deadlines for the law are looming.
By Aug. 16, insurers selling plans on HealthCare.gov are supposed to finalize their rates. And on Sept. 27, insurers sign contracts and lock in their participation in the federal marketplace.
More insurance companies may decide to exit the ObamaCare exchanges if they don’t know by then how the law will be implemented.
“We’re likely to see some insurers going back and asking for even higher premium increases from what they initially requested,” Cox said. “And if they don’t get more clarity soon from Congress or from the administration, we may see more insurers exiting the market later this month or next month.”
In 20 states and Washington, D.C., an average of 4.6 insurers indicated their intention to participate in the marketplaces for plan year 2018, according to the analysis. Comparatively, 5.1 insurers participated per state in 2017.
Yet, as of Friday, 17 counties are at risk of having no insurers participate in their health exchanges, according to a Kaiser tracking tool. This would impact more than 9,500 enrollees.
Insurers want to know if Congress or the administration will fund cost-sharing reduction payments, which compensate them for subsidizing the out-of-pocket costs for certain consumers. They total about $7 billion for fiscal 2017, and the administration has been funding them on a monthly basis.
On Capitol Hill, the Senate Health Committee will hold bipartisan hearings the first week in September in an effort to craft a short-term market stabilization bill both parties can agree on.
Sen. Lamar AlexanderLamar AlexanderFive tough decisions for the GOP on healthcare GOP senator: Trump may have been only one who didn’t realize healthcare complexity Trump plays healthcare politics while Americans get stuck with the bill MORE (R-Tenn.), the panel’s chairman, said any bill should fund the cost-sharing reduction payments, giving insurers certainty that Trump won’t abruptly halt them. A bill should also include “greater flexibility for states in approving health insurance polices,” Alexander said.