Early clues suggest that health insurance prices in Affordable Care Act marketplaces could jump again for the coming year, defying predictions that premium rates would begin to level off.
Amid the uncertainties hovering over those marketplaces as the Trump administration and a Republican Congress try to dismantle major parts of the law, many states have postponed for another few months their spring deadlines for insurers to report how much they want to charge for ACA health plans in 2018.
But the first four states to announce proposed rates in recent days reveal that insurers are seeking double-digit increases — in some cases far exceeding the average 25 percent jump for the most popular group of ACA plans in 2017. The sharp rise further fueled Republicans’ rallying cry to repeal the law.
Elsewhere around the country, insurers and state insurance commissioners have begun to caution that the GOP’s maneuvering in Congress and through executive actions could drive up prices.
The president of BlueCross BlueShield of Tennessee sent a letter Tuesday to that state’s insurance commissioner, agreeing to sell coverage in eastern counties that otherwise could lack any ACA coverage next year. But he said the decision is not “a reflection of our perspective on the stability of individual marketplace overall. In fact, we can’t justify doing so based solely on current political uncertainty.”
As a result, the rates to be filed by July 1 will “price-in those downside risks,” the letter noted.
The Washington area includes three of the four jurisdictions that have released proposed 2018 marketplace rates for individuals and families buying health plans on their own. The largest insurer in the Mid-Atlantic region, CareFirst, is requesting an average increase of 52 percent in Maryland and 21.5 percent in Virginia. For the District, CareFirst is asking for an average increase of 40 percent for HMO plans and 20 percent for plans with preferred-provider networks.
In Virginia, the seven insurers proposing prices for 2018 compares with 11 now selling ACA health plans there. The largest, Anthem, wants an average rate hike of 38 percent, more than double its increase from 2016 to 2017.
Anthem also is asking for a 34 percent average increase in Connecticut, while the second insurer selling ACA plans to residents is seeking a 15 percent increase.
States vary in how they handle health insurance rates. Some review what insurers propose and then negotiate final rates, while other states give insurers latitude to charge what they want. The rates announced in the District and those three states are merely requests, which could be lowered after regulators’ scrutiny. Insurers proposing rates now also could decide by late summer, when they must sign federal contracts for the ACA marketplaces, not to participate after all.
Fragmentary as the early picture is, it suggests that Obama administration officials and other supporters of the 2010 health-care law may have been optimistic when they predicted last fall that the large jump in premiums for 2017 was a course-correction that would be followed by a period of more stable prices.
On Tuesday, Senate Republicans seized on the early rate requests, issuing a statement that decried “massive, double-digit price premium” increases and quoted Majority Leader Mitch McConnell (R-Ky.) as saying that Americans are “watching as Obamacare collapses all around them.”
Yet insurance commissioners, insurance officials and leaders of ACA marketplaces attribute the high preliminary rate proposals to more-conservative health policies that the GOP is trying to usher in, along with uncertainty about some important decisions that the Trump administration has not yet made.
Under the American Health Care Act, GOP legislation that squeaked through the House last week, the government would no longer penalize people for failing to have coverage, as the ACA requires. And since Trump took office, the Internal Revenue Service has decided to process tax refunds even for people who fail to report their insurance status.
In addition, the White House has sent mixed messages about whether it will continue to appeal a federal lawsuit over the legality of “cost-sharing reductions” that help about 6 million people with ACA plans nationwide to afford deductibles and copays.
Late last month, Covered California, the nation’s second-largest ACA insurance exchange, released the results of a consultant’s study of the likely effects there if enforcement of the individual mandate ceased and the cost-sharing subsidies went away.
The California study by PricewaterhouseCoopers estimated that the end of both aspects of the law could cause premiums to rise by 28 percent to 49 percent, in part because healthy people would stop buying coverage. The cost increase could lead to 340,000 fewer Californians with coverage, the study concluded.
“[T]he possibility of changing the rules . . . is threatening to upend markets and put consumers at risk,” exchange executive director Peter V. Lee said in a statement.
In Pennsylvania, meanwhile, the insurance commissioner and the chief executives of the five insurers remaining in the state’s ACA marketplaces cited the same two parts of the law in a recent joint letter to Health and Human Services Secretary Tom Price.
“Putting aside the larger political debate over the ACA, we would like to more immediately address the threat of, and uncertainty related to, rapid changes and a lack of funding,” they wrote, saying that such changes “could undermine the progress we have made, reduce coverage options and significantly increase prices for millions of vulnerable Pennsylvanians.”