The nearly 200,000 people who buy Affordable Care Act policies on Maryland’s health insurance exchange will see lower premiums next year, state officials announced Friday, as Maryland joins a handful of others taking action to calm roiling health insurance markets.
Two Maryland insurance companies requested lower rates after Gov. Larry Hogan (R) and the Democratic-led state legislature created a $380 million reinsurance fund to offset the risk to insurers in the individual market.
Without the fund, the insurers had proposed rate increases of as much as 91.4 percent for 2019. Instead, health insurance policies on the exchange will be 13.2 percent cheaper than the current rate, on average.
Hogan said during an Annapolis news conference that it marks the first time in 20 years the state’s major insurer, CareFirst, offered lower premiums than the year before. Kaiser is also dropping its rates.
Hogan praised Democratic leaders for joining his administration to create the reinsurance fund, which taxes health insurance companies to help pay the most costly claims. Maryland is one of 14 states to ask the federal government to let them intervene to help stabilize the health insurance market.
Hogan said inaction from the federal government and other policy shifts had put Maryland’s individual health insurance market “literally on the brink of collapse.”
“There’s plenty of blame to go around, but there’s no question that Washington has failed us for years,” Hogan said. “Neither political party seems to have the will or the ability to fix these problems at the national level. So we decided to address this crisis head on in Maryland.”
Maryland Insurance Commissioner Al Redmer called the reinsurance fund, which runs until 2020, a “short-term” solution to health insurance markets that have been destabilized.
“What we really need — and what we’ve been advocating for years — is to have Congress to put aside those partisan differences and come up with a solution, or give us more authority to make changes at the state.”
Neither Redmer, a Republican who is running to be Baltimore county executive, nor Hogan directly criticized actions taken by the Trump administration and Congress to erode the Affordable Care Act.