Maryland regulators have given two insurance carriers permission to substantially raise monthly premiums on some plans in a direct response to a Trump administration decision to halt certain subsidies under the Affordable Care Act.
The steep increases will raise costs by as much as 76 percent over last year for silver-level individual plans on the state exchange and come atop already approved increases for 2018.
The added rate hikes were approved Wednesday after the two insurance carriers that sell individual plans in Maryland said they needed to make up for losses created after an executive order from President Trump eliminated some cost-sharing with companies to help low-income customers.
The price hikes approved for CareFirst Blue Cross and Kaiser Permanente come less than a week before the start of open enrollment when customers can decide whether to stick with their current insurers or switch.
About 25,000 Maryland residents would feel some financial impact from the new rates if they choose to stick with their current coverage, state regulators said.
The subsidy change is one more shift since late summer that adds to ongoing consumer confusion, according to leaders of insurance exchanges and enrollment-assistance organizations around the country.
The Trump administration had signaled it wanted to end cost-sharing reduction payments known as CSRs that are made to insurance companies to help absorb the costs of discounted deductibles and co-payments the companies are required by law to offer some consumers.
Some states anticipated the administration change and told insurers to propose rates for 2018 assuming they wouldn't get the subsidies. Maryland did not take that tack. When President Trump announced earlier this month he was ending CSRs, the state scrambled to respond to rate requests from CareFirst and Kaiser.
"We didn't want to arbitrarily increase rates a month or so ago without having to," said Maryland Insurance Administration Commissioner Al Redmer. "We erred on the side of the consumer to keep prices as low as possible for as long as we could."
On Wednesday, the state gave CareFirst approval to raise premiums by 58.2 percent for its silver HMO plan and 76 percent for its silver PPO plan — both slightly less than what the insurers sought to make up for lost federal payments. Kaiser's premiums for its silver HMO plan will go up by 43.4 percent, which is 10 percentage points higher than the company had sought.
Before Trump's executive order, Maryland had already granted the two insurers the right to raise rates by double digits for 2018.
Even if the CSR payments had remained in place, CareFirst said it believed it would need increases for its silver HMO and PPO plans of 31.4 percent and 52.1 percent, respectively, while Kaiser had sought an increase for its silver HMO plan of 22.7 percent.
The federal payments that were eliminated have been the more obscure of two types of subsidies created by the sprawling 2010 health-care law to help Americans afford coverage if they cannot get such benefits through a job.
The better-known subsidies help lower the monthly premiums owed by nearly 85 percent of the roughly 10 million Americans with ACA coverage. Consumers below a certain poverty level are eligible for reductions in their premiums in the form of tax credits.
The second subsidies to support lower deductibles and co-payments were targeted to help individuals making between around $12,000 and $29,700 annually. The insurance companies provided those discounts and were then compensated by the federal government.Customers eligible by law for those discounts will continue to receive them under the law but companies lost the federal help they got for offering that coverage.
Maryland is part of a multi-state lawsuit filed against the Trump administration to reinstate the payments to insurers. On Wednesday, a federal judge in Northern California denied the states' request to require the Trump administration to continue the CSR payments while the case is decided.
Redmer said if the court rules in states' favor and the CSRs are restored, Maryland will "look for mechanisms to make whole anyone who has been adversely effected by this."
Nearly all of the 96,000 Marylanders who previously purchased the individual silver plans receive some financial assistance to help them pay their premiums based on an income sliding scale.
Regulators estimate around 25,000 of them would end up paying more out of pocket due to the rate increases if they stick with their same plans for 2018.
State officials are encouraging those consumers to shop for other plans on the state-run exchange as well as consider looking at plans sold off the marketplace.
Maryland has tried to mitigate the financial pain felt by consumers, but it can't rectify the confusion these changes cause.
This is what worries Ceci Connolly, president of Alliance of Community Health Plans, whose members include Kaiser.
With the mixed messages around health care policy out of Washington and the White House already declaring ACA dead, she fears some consumers will be too flummoxed to even enroll.
"Health insurance is already a complicated thing to navigate and all of the confusion and debate has made it very difficult for anyone to know what's going on," she said. "You have to give credit to so many states officials who really tried to be super flexible in this chaotic environment, they don't want plans in their areas to go bankrupt. It continues to be a very challenging environment and almost daily the playing field changes."
Open enrollment in Maryland will still begin on Nov. 1 and end on Dec. 15, a much tighter window than previous years.