Freezing of ACA funding gets mixed reaction

Action could increase rates, alter market

Pittsburgh Post-Gazette

The federal government froze a key funding cog in the Obamacare health insurance machinery Saturday even as the Pennsylvania Insurance Department was reviewing rates that insurance carriers had proposed for 2019, injecting more uncertainty into an already uncertain market.

The Trump administration froze the risk adjustment mechanism of the Affordable Care Act, which stopped the collection and distribution of funds paid by insurers to balance the market.

UPMC Health Plan mostly shrugged off the move, while Highmark worried the action may increase rates and push carriers out of the market.

Caleb Wallace, senior director of policy at UPMC Health Plan, said the Pittsburgh insurer wouldn’t seek to alter its rate proposal to the state, even if there were a way to do that. “Right now, there’s no provision fornew rate filings,” Mr. Wallace said. “But we have no intention ofasking to change rates.”

UPMC chief actuary John Wisniewski said the insurer is anticipating restoration of the government’s funding mechanism, which the carrier has paid into in some years and received payments from in other years.

Highmark officials were not available for comment, but in a statement suggested that the Center for Medicare and Medicaid Services’ action could mean higher premiums for consumers.

“Unless the current course changes, this action by the administration will mostly likely have an impact on rates for 2019 and some carriers may choose to leave the market,” the statement read. “We will need to work collaboratively with insurance departments where we do business to address this issue.”

Pennsylvania Insurance Commissioner Jessica Altman said no insurer had yet indicated that it would pull out of the market or increase rate proposals because of the government’s action.

She, too, was quick to stress the importance of the funding mechanism.

“I do not want to underestimate the value of the risk adjustment payments to the individual market,” she said. “It’s absolutely critical.”

Overall, Affordable Care Act rates were expected to rise an average of 4.9 percent in 2019 for individuals and 3 percent for small group policyholders, the