Maryland insurers asking for double-digit premium hikes
Premiums for ObamaCare plans in Maryland are poised to rise substantially next year.
CareFirst BlueCross BlueShield, which is the largest insurer in the Mid-Atlantic, has asked state regulators for an average 26.4 percent increase. The range of hikes runs from an 18.5 percent increase for its HMO plans to a 91.4 percent for its PPO plans.
Kaiser Permanente has asked for a 37.4 percent increase.
Insurers have said a number of policies being promoted by the Trump administration are to blame for rising premiums and the departure of healthy people from the risk pool, including the repeal of ObamaCare’s individual mandate penalty.
The administration also made it easier for insurers to sell cheaper, skimpier plans.
“There’s been a series of actions taken by the current administration that have undermined enrollment,” said Chet Burrell, president and CEO of CareFirst.
None of the rate filings take into account the state’s reinsurance program, which is intended to stabilize premiums. The reinsurance program would use $975 million in state and federal funds over five years to lower rates.
Burrell said if the Trump administration would approve the program, premiums could fall by as much as 20 or 30 percent.
“It’s greatly concerning to us that the rates are what they are, and it’s why we are supportive of actions in Maryland to stabilize the market through a reinsurance program,” Burrell said during a call with reporters. “This legislation was a very brave, constructive step.”
Burrell added it’s too soon to know what the specific effects are of repealing the mandate, but predicted if the reinsurance proposal isn’t approved, “premiums will be really unaffordable going forward.”
Burrell said CareFirst wants to continue participating in the state exchanges, but noted the company has lost about $600 million on the exchanges since they launched 2014, which makes up about 6 percent of the company’s business.
Burrell said dwindling enrollment and a much sicker risk pool are the main contributors to such high rates. The premium spikes are driving the younger, healthy people to drop their coverage, leaving only the sickest people left, especially in the PPO market, he said.
“This isn’t driven by services to this population costing more than it would be for someone in a small group, this is driven by sickest people left in the pool,” Burrell said.
The rate requests must be approved by regulators and may change. Final premiums will have to be approved ahead of the next open enrollment period, which begins Nov. 1. Health plans will file requests in other states between now and late July.
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