Pa. insurance department: Obamacare rates to jump 30.6 percent
Trump scraps federal subsidies
Pennsylvania insurers offering Obamacare plans will need to raise premiums an average 30.6 percent in 2018, nearly four times the increase that had been anticipated before President Donald Trump scrapped government subsidies five days ago.
The new numbers come from the state Insurance Department, which on Monday released the rate hikes that it had approved after calculating the impact of the president’s move.
Earlier this year, the Pennsylvania Insurance Department had projected an average 7.6 percent rate hike for individual health insurance plans purchased through the Affordable Care Act’s government exchange in this state.
Acting commissioner Jessica Altman said she was disappointed by the news. “It is with great regret that I must announce approved rates that are substantially higher than what companies initially requested,”
Ms. Altman said in a prepared statement.
“This is not the situation that I hoped we would be in, but due to President Trump’s refusal to make cost-sharing reduction payments for 2018 and Congress’ inaction to appropriate funds, it is the reality that state regulators must face and the reason rate increases will be higher than they should be across the country.”
Only about 85,000 of the Pennsylvanians who get health insurance through the Affordable Care Act will see higher premiums in the new year because their incomes are too high to be eligible for subsidies. The state Insurance Department is working to minimize the increases, Ms. Altman said.
The rest of the 426,000 Pennsylvanians who use the marketplace will not see increases. The U.S. Treasury will make up for the loss of cost-sharing premium reductions for most of those enrolled in Obamacare, which will cost the government more than if the premium-reduction subsidy had been untouched.
“Most people on the exchange will be shielded from this increase,” Ms. Altman said. “Our market was on the path to stability and now people and families are being used as pawns to show that the ACA is failing.”
Individual consumers are eligible for health insurance subsidies with annual earnings up to $47,480. The level is $97,200 for a family.
Eliminating cost-sharing premium reductions paid to insurers would increase the federal deficit by $194 billion from 2017 through 2026, according to the Congressional Budget Office.
The decision last week to end the premium reductions triggered cheers and jeers from various sides of the political debate. The move came after Congress failed more than once this year to repeal the Affordable Care Act.
Despite failure to win consensus in Congress, the Trump administration had already moved to reduce marketing in support of enrollment in the marketplaces and shortened the enrollment period.
“Obamacare is causing such grief and tragedy for so many,” Mr. Trump tweeted Oct. 13. “It is being dismantled but in the meantime, premiums & deductibles are way up!”
On Monday, Gov. Tom Wolf said congressional leaders were “complicit in rate increases across the country.”
“Washington has utterly failed to make commonsense changes to fix our health care system and bolster the Affordable Care Act,” Mr. Wolf said in a prepared statement. “They have pursued political goals instead of practical ones.”
The rate hikes released Monday by the Pennsylvania Insurance Department were higher than those requested by the insurers themselves before the latest changes were made on the federal level.
Insurance carriers must justify rate increases for the government exchange in regulatory filings and the state can accept, reject or modify those rates after review for actuarial integrity.
UPMC Health Options Inc., the dominant Affordable Care Act insurer in Western Pennsylvania, was approved for a 41.1 percent rate hike following a request for a 7.99 percent rate increase. Highmark had sought a 20 percent rate hike but was approved for a 25.2 percent increase.
Capital Advantage Assurance Co. had the highest approved rate in Pennsylvania — 49.20 percent after requesting a 12.15 percent increase for its customers in the Harrisburg area.
Highmark and UPMC have each said they have no plans to withdraw from the ACA market.
Ms. Altman strongly encouraged people who do not quality for premium subsidies to shop outside the government exchange. Pennsylvania has five government marketplace insurers and each has committed to selling the policies for 2018, despite market uncertainty.
Mr. Trump’s Oct. 12 executive order ended costsharing subsidies the government pays insurers to help make rates affordable, but more than two dozen state attorneys general have joined a lawsuit to block the cut.
More than half of Pennsylvania’s Affordable Care Act members received cost-sharing reductions, which totaled $214 million in 2016, or an average of $949 per enrollee, according to Antoinette Kraus, director of Pennsylvania Health Access Network, a Philadelphia-based advocacy group.
Open enrollment for Obamacare begins Nov. 1 and consumers must sign up by Dec. 15 for health coverage to be effective Jan. 1. People who don’t have ACA-approved health insurance are subject to financial penalties.