On average, insurers seek 2% rate rise, agency says

The rates for plans sold through Arkansas’ health insurance exchange would increase an average of just over 2% next year under requests submitted by the insurance companies, the state Insurance Department announced Monday.

The proposals include average increases of about 2.9% for Arkansas Blue Cross and Blue Shield plans covering more than 166,000 people and 1.9% for Centene plans, sold under the brand name Ambetter by Arkansas Health and Wellness, covering almost 68,000 people.

The rates for plans offered by Little Rock’s QualChoice Health Insurance, which was bought by St. Louis-based Centene earlier this year, would increase by less than 0.6%.

That includes increases of 0.51% for one set of plans covering 18,401 people and 0.56% for another set cover

ing 18,935 people.

Most people covered by the plans are low-income Arkansans whose premiums are paid with federal and state Medicaid funds under the Arkansas Works program.

That program, which also covers much of the recipients’ out-of-pocket expenses for medical care, paid the premiums of more than 201,283 Arkansans last month.

In a news release, the Insurance Department noted that rate filings for each of the companies cited the planned elimination of a fee that had supported the Arkansas Health Insurance Marketplace, a state agency that was absorbed by the department as a result of a law passed during this year’s legislative session.

This year, the fee is equal to 1.25% of the premiums for non-Medicaid plans sold on the exchange through healthcare.gov.

The Insurance Department began collecting the fee after it took over the marketplace’s duties, including educating consumers and certifying exchange plans, but it will stop collecting it next year, Insurance Commissioner Allen Kerr has said.

Kerr has said the department will use the $4.3 million it expects to collect through the end of this year to cover the cost of handling responsibilities related to the exchange for at least the next eight years.

“The initial 2.08% average increase requested shows the stability of Arkansas’ marketplace, the strength of the Governor’s Arkansas Works plan, and how placing AHIM under the control of AID led to the elimination of an unnecessary 1.25% marketplace fee paid by consumers and Arkansas taxpayers,” Kerr said in the release.

In a tweet, Sen. Jason Rapert, who sponsored the legislation eliminating the marketplace as a stand-alone entity, credited lawmakers and Gov. Asa Hutchinson for the “great news.”

“We worked hard to make things efficient, and this is proof of that,” Rapert, R-Conway, said.

In addition to the state fee, insurance companies pay the federal government a fee equal to 3% of the premiums for non-Medicaid plans sold through healthcare.gov, to support the website’s operations. That fee is expected to drop to 2.5% next year.

Under the 2010 Patient Protection and Affordable Care Act, coverage in the non-Medicaid plans is subsidized for people who don’t have access to health insurance from an employer and who have incomes below 400% of the federal poverty level.

This year, that cutoff is $49,960 for an individual or $103,000 for a family of four. An annual open-enrollment period for coverage under those plans starts Nov. 1 and runs through Dec. 15.

If the rates are approved by Kerr, then the average increase would be Arkansas’ second-lowest since subsidized coverage under the Affordable Care Act first became available in 2014.

The smallest increase was in 2015, when rates for exchange plans decreased an average of 2.2% compared with a year earlier.

This year, rates increased an average of less than 5% compared with 2018.

Marci Manley, a spokesman for the Arkansas Department of Human Services, said the department doesn’t yet know how the proposed rates would affect the cost of Arkansas Works, which covers adults with incomes of up to 138% of the poverty level who became eligible for Medicaid under the expansion of the program in 2014.

The income cutoff this year is $17,236 for an individual or $35,535 for a family of four.

As part of the Affordable Care Act’s enhanced funding for Medicaid expansion, the federal government is paying 93% of the cost of Arkansas Works coverage this year and will pay 90% starting Jan. 1. State officials have projected Arkansas’ cost at $177 million for the state fiscal year that started July 1.

Kerr will rule on the rates by Sept. 18, Insurance Department spokesman Ryan James said.