Why some states could see double-digit drops in exchange premiums next year—while others could see double-digit hikes

Health insurance companies in some states have proposed premium rate hikes for 2018 exchange plans averaging 30 percent or more when compared with 2017 premium rates, according to preliminary data HHS released Tuesday—and many are citing uncertainty about the Affordable Care Act's (ACA) future as contributing to the increases.

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Preliminary data shows varying rate increases

The data showed that large health insurers in Hawaii, Idaho, Iowa, New Mexico, North Dakota, South Carolina, Tennessee, West Virginia, and Wyoming are seeking average rate increases of at least 20 percent. Some of the highest proposed rate increases include:

  • An average 44 percent increase proposed by SelectHealth of Idaho;
  • An average 43.5 percent increase proposed by Medica in Iowa; and
  • An average increase of about 40 percent proposed by Blue Cross-Blue Shield of Georgia.

However, insurers in some areas are seeking lower average increases. For instance, Centene has requested a less than 1 percent average increase for exchange coverage it plans to sell in New Hampshire, although the insurer also requested a 12.49 percent increase in Georgia and a 21 percent increase in Texas.

Health Care Service Corp. requested an average 8.3 percent increase for coverage it plans to sell in Oklahoma, as well as average increases of 16 percent in Illinois and 23.6 percent in Texas.

In Arizona, Blue Cross Blue Shield of Arizona has proposed an average 7.2 percent increase for 2018 exchange plans, and Centene's Ambetter by Health Net has proposed average increases of less than 5 percent. In comparison, both insurers had requested increases of about 50 percent for the 2017 coverage year.

Minnesota regulators on Monday announced that proposed rates for 2018 exchange plans in the state ranged from an almost 15 percent decrease to an 11 percent increase. Regulators said comparatively low proposed rates stemmed in large part from a reinsurance program the state has proposed to help offset insurers' losses on exchange plans. They added that if the federal government does not approve the proposal, insurers would seek premium increases ranging from 3 to 31 percent.

In Alaska, Premera—the only insurer planning to sell 2018 exchange coverage in the state—on Tuesday announced that it has requested an average 21.6 percent decrease in premium rates, also largely due to a reinsurance program the state has created.

Proposed increases highlight uncertainty in the market

According to the Wall Street Journal, the filings reflect uncertainty about potential changes the Trump administration could make that would affect the exchange market.

For example, President Trump has threatened to stop paying insurers for cost-sharing reductions (CSR) called for under the ACA. Insurers have said the payments are vital to keeping the exchange market stable, and some have indicated they could pull out of the exchanges if the payments are discontinued, while others have said they would be forced to raise premium rates. Trump advisor Kellyanne Conway on "Fox News Sunday" said Trump would decide this week whether to continue making the payments.

In addition, some insurers have expressed concern about whether the Trump administration could weaken enforcement of the ACA's individual mandate, which they say helps to reduce premiums by encouraging younger, healthier U.S. residents to enroll in exchange plans.

The insurer Health Care Service said 17 percentage points of its proposed 23 percent average rate increase for 2018 exchange coverage it plans to sell in Montana is linked to concerns about whether the administration will continue making the CSR payments and enforcing the individual mandate.

Blue Cross of Idaho proposed an average 28 percent increase for its 2018 exchange plans, and Dave Jeppesen, a senior vice president at the company, said the increase likely would have been lower if the company knew it would receive the CSR payments. "There's a lot of risk associated with the uncertainty ... right now, and we are pricing appropriately for that risk," he said.

Likewise, Anthem—which already has proposed average increases of more than 30 percent in various states, including Colorado, Kentucky, Nevada, and Virginia—has said it could request larger rate hikes or withdraw from exchange markets if uncertainty about the CSR payments continues.

Further, California exchange officials on Tuesday announced that insurers overall were seeking an average increase of 12.5 percent for 2018 exchange plan premiums, but that some plans could see additional increases averaging 12.4 percent if CSR payments are not made.

Similarly, average premiums for 2018 exchange plans are projected to increase by an average of about 9 percent in Pennsylvania if CSR payments continue and by an average of about 20 percent if the payments cease.

Bill Wehrle, a vice president at Kaiser Permanente, said, "Resolution of the [CSR payments] is an urgent issue," adding, "We're coming up at a point that's fairly soon, where the pricing decisions we make are set for all of next year."

According to the Journal, insurers planning to sell 2018 exchange plans have until mid-August to file their rate proposals and have until late September to sign contracts to sell coverage through the federal exchange. Many states and the federal government still have to approve some of the proposed rate requests, meaning final rates for 2018 exchange plans still could change  (Wilde Mathews/Radnofsky, Wall Street Journal, 8/1; Bazar et al., Kaiser Health News, 8/2; Miller, WABE, 7/7; Kruesi, AP/Sacramento Bee, 7/31; Christie, AP/Sacramento Bee, 8/1; Potter, AP/Sacramento Bee, 7/31; Martinson, Alaska Dispatch News, 8/2).

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