Commissioner holds forum on insurance woes
EASTON — In May, the Mar yland Insurance Administration released a statement with regard to health insurers requesting an increase of 50 to 90 percent in the individual market.
The request came from major health insurance carriers, including Care First Blue Choice Inc., Care First of Maryland, Cigna and the Kaiser Foundation of the Mid-Atlantic. Care First, Cigna and Kaiser are the only individual insurance options through the Maryland Health Connection exchange.
These increases will cost the average 40-year-old, nonsmoking adult anywhere from $359 a month with Kaiser to a $714 a month through Care First of Maryland.
In a statement released in May, the state of Maryland Insurance Commissioner Al Redmer Jr. said these were merely requests.
“It is important to remember that these rates are what companies have requested and not necessarily what will be approved,” Redmer said. “There will be a thorough review of all the filings. As in years past, we may require changes.”
To discuss these changes and other insurance updates, Redmer and his staff held an informal public meeting Wednesday, Aug. 23, in the Chesapeake Room of the Talbot County Community Center.
Redmer said he holds these meetings semiannually and regionally to reach out to consumers, producers, business owners and insurance entities.
“We have important decisions to make, and too often in government or in any other big organization, folks get in that ivory tower and they never come out — not that we have an ivory tower,” Redmer said. “But these meetings are very helpful to us, to get out and talk to real people that are in this business every day. It helps us get a better understanding of what is going on.”
He said there are geographical issues that occur, so it is important to get out to other parts of the state.
“Thats why we come to Easton, to Hagerstown, to Salisbury. So we are able to get around to different parts of the state,” Redmer said. “The needs of one side of the state are not the same as other areas.”
The all-day meeting was held in an open forum style and broken down into two parts.
The first was from 10 a.m. until noon, with only a dozen attendees. The agenda for the first meeting focused on property and casualty insurance, disaster preparedness and updates from the National Association of Insurance Commissioners, including auto insurance and travel insurance.
The second meeting began at 1 p.m., and drew a much larger crowd. More than 30 people attended to hear the commissioner’s stance and plans in addressing life and the hot-button health insurance matters.
Attendees for the second forum included Sen. Addie Eckhardt, R-37-Mid-Shore; Del. Johnny Mautz, R-37B Talbot; local insurance agents; insurance producer lobbyists; and mental health professionals.
The health and life insurance meeting went over several topics: long-term care insurance, short-term medical insurance, coverage gaps in Lymphodema workgroups and pharmacy benefits.
The most discussed topic was the Affordable Care Act and its longevity, along with the requested increase in insurance rates.
Bob Morrow, associate commissioner for life and health for the state of Maryland, led the discussion on the Affordable Care Act. He said Congress is out of session, but when it comes back in two weeks, it will have a lot to do in a short amount of time.
“What I can tell you is, in the individual market, everybody is aware that we have seen the largest requested rate increase we have ever had,” Morrow said. “This year, obviously, it is a result of a lot of things but primarily losses in the individual market.”
He said the individual insurance market in Maryland has not stabilized and the requested rate increases reflect that.
“That private market is a huge problem,” Mautz said. “A lot of people I talk to cannot afford to pay for the insurance they have now. The people I talk to are in their mid-50s, they live healthy lifestyles, yet they are paying more for health insurance than they are their mortgage.”
Redmer said the problem is the disproportionally large amount of sick individuals who are buying the insurance plans versus healthy individuals who are opting out of insurance plans altogether.
“The sick are ringing the bell with medical expenses,” Redmer said. “The problem is not the size of the group. The problem is, disproportionally, they are older and sicker. The issue is how do you get the price low enough to encourage healthier, younger folks back into the market.”
Redmer said Care First received a 25 percent increase last year, and when that increase hit, consumers had to make a choice whether to “suck it up,” or drop insurance and go without coverage.
Redmer said in addition to the rate increase request this year, Care First is eliminating its point-of-ser vice plans in the individual market.
“Those 26,000 people that were in that HMO plan, the point-of-ser vice option will now have to make an election to a different plan,” Morrow said.
Morrow said while the individual market rate requests are high, the news for the small group market for employers and employees is a lot better, with rate requests peaking at 38 percent.
Redmer said all the requested rate increases directly reflect the failure of the ACA.
“You read about the term ‘death spiral,’” Redmer said. “In my opinion, we are there.”
Redmer said the problem with the ACA is it is designed as one-size-fits-all around the country. He said because of that model, there is no flexibility on the state level.
“This puts us between a rock and hard place,” Eckardt said. “We have to do something before we reach a tipping point, the point in which people stop participating all together.”
“We are just about at that tipping point already,” Redmer said.
Morrow said Care First conducted a recent presentation stating what is driving the cost is 13 percent of the people are accounting for 70 percent of the total costs.
Redmer said Maryland is faring better than some states where there is no coverage available within certain counties.
“Unfortunately, at the state level, we cannot fix this,” Redmer said. “The federal government, when they created the Affordable Care Act, just about ever ything is done at the federal level with very little flexibility.”
Redmer said the more decision making at the local level, the better.
“I would much rather have the Maryland General Assembly making those decisions rather than the federal government,” Redmer said.
For more information about the requested rate increases or other State of Maryland insurance questions, visit www.insurance.mar yland.gov.
On Wednesday, Aug. 23, in the Chesapeake Room of the Talbot County Community Center, Maryland State Insurance Commissioner Al Redmer Jr. and staff held a public discussion of insurance changes and updates.