NEW REPORT: VAST MAJORITY OF STATES ATTRIBUTE HEALTH INSURANCE RATE INCREASES TO TRUMP SABOTAGE
The deadline for states to finalize premium rates for the individual and small group market and submit them to the federal government for approval was one week ago (9/27/17) and many states have publicly announced double-digit increases.
In a comprehensive review of all the 28 states whose final state-approved rates that have been made public, this new report from Protect Our Care shows that the vast majority — 20 states — attribute their rate increases in part to the Trump administration’s sabotage of our health care. Blame for the increase was squarely placed on the Trump administration and Republicans in Congress injecting uncertainty into the marketplace by threatening to default on cost-sharing reduction (CSR) payments that help lower out-of-pocket costs in some way, shape or form.
Our analysis finds:
- 20 states attribute rate increases to uncertainty over whether the Trump administration will make CSR payments: Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Louisiana, Maine, Michigan, Mississippi, New Mexico, New York, Ohio, Oregon, South Carolina, South Dakota, Tennessee, Utah, Virginia and Washington. (Oregon cited weakening enforcement of the individual mandate for some of its rate increase.)
- Five states indicated their state increases would be even higher if they assumed the Trump administration would not be making the CSR payments: Arizona, Arkansas, Colorado, Maryland and Vermont.
- Two states — Alaska and Minnesota — have mostly cut their insurance rates next year after the federal government allowed them to start a new reinsurance program.
- One state, Nevada, did not release any reason for their 2018 rates.
While they’re not included in this analysis of rates, the sabotage has had other consequences including insurers that decided not to participate in the marketplace next year, citing the uncertainty the Trump administration had created. Anthem in Maine announced it was exiting the marketplace at the last minute, as well as Medica in North Dakota, to name a couple of examples.
Experts warned failure to make these payments would raise premiums by 20% or more.and add nearly $200 billion to the national debt. Even Sen. Lamar Alexander (R-TN) warned, “Without payment of these cost-sharing reductions, Americans will be hurt.”
President Trump has been cheerleading his sabotage for months saying earlier this year, “the best thing we can do…is let Obamacare explode” and “let it be a disaster because we can blame that on the Democrats.”
We now have the clearest evidence yet that the Trump administration’s sabotage of our health care system is leading to the higher insurance rates we are seeing for 2018.
Prior to the Trump administration, independent analyses show that the Affordable Care Act was working. Standard’s & Poor said it expected insurers’ performance in the marketplaces to be better in 2016 than in 2015, and 2017 would be better than 2016. The nonpartisan Congressional Budget Office said it anticipated “the market to be stable” under the ACA. The average premium after tax credits increased by $1 dollar, from $100 in 2016 to $101 in 2017.
Evidence is Clear: States Blame Uncertainty for Even Higher Rates
Individual Market Avg Rate Increase
What They Said
BCBS of Arizona — 1 %
Associated Press: “Jeff Stelnik, the [BCBS of AZ]’s senior vice president of strategy, sales and marketing, told The Associated Press the change came because of improved profitability on current plans and an assumption that the federal government will continue funding a program reducing some customer costs. The decision comes despite worries from many insurers that the “cost sharing reductions” they are required to offer many lower-income customers won’t be funded by the Trump Administration. ‘There still continues to be uncertainty in the marketplace, we still continue to be concerned by that uncertainty,’ Stelnik said. But he said a deadline for finalizing premiums for 2018 and a better balance between premiums and claims ‘enabled us to be confident in the new pricing that we are putting in the marketplace.’”
Ambetter — 9.9 %
QCA Health — 8.94 %
AR BCBS — 7.80 %
[Note: Insurers updated their rate requests on August 21 that reflected higher rates assuming no CSR payments. The state-approved rates are more aligned with the earlier requests.]
Colorado Division of Insurance: “In Colorado, premiums for individual plans (not from an employer) will be increasing by an average of 26.7 percent…The premiums would be up to 14 percent higher if we used the non-CSR-funded premium requests.”
Anthem — 31.7 %
CBI — 27.7 %
Connecticut Insurance Department: “The federal funding of the CSR payments for coverage year 2018 would have reduced the approved rate increases from 27.7% to 16.8% for [ConnectiCare Benefits Inc] and from 31.7% to 24.7% for Anthem.”
“As a result of the lack of clarity about future funding of CSRs and the need to make rate determinations for 2018, the Department asked exchange carriers to make a supplemental filing which assumed CSRs would not be paid. The supplemental rate increase for non-payment of the CSRs is 16.7 percent, this is applied only to the Silver exchange plans. The increase in rates for the Silver exchange plans will be mitigated for consumers receiving tax credits by the increase in the federal tax credits for 2018.”
Miami Herald: “Florida regulators said most of the average rate hike — 31 percentage points [of the 44.7 percent total] — came from standard plans sold on the ACA exchange at Healthcare.gov. Insurers raised rates for those plans due to the political uncertainty that has plagued the healthcare debate, specifically whether the Trump administration will stop paying subsidies that lower out-of-pocket costs for low-income Americans.”
(Non CSR proposed rates)
BlueCross Blue Shield — 57.5 %
Ambetter — 51 %
Alliant Health Plan — 53.3 %
Kaiser Foundation Health Plan — 56.7 %
Atlanta Journal-Constitution: “Every single one of the four companies offering policies on the exchange here plans to raise their rates by an average of more than 50 percent, if Washington does not give certainty on the subsidy funding.”
Idaho Statesman: “‘The rate increases, in particular on silver-level plans, are definitely greater than we would like,’ said Idaho Department of Insurance Director Dean Cameron. ‘There is legitimate uncertainty” regarding whether the government will continue to pay for certain subsidies for low-income users of the exchange….The rates that insurers are slated to charge for “silver” plans next year would be cut by more than 20 percent if subsidies are continued, according to the Idaho Department of Insurance. And that would affect how much actual help consumers would get to pay for those pricey “gold” plans.”
Illinois Department of Insurance: “‘DOI is committed to ensuring that consumers are prevented from incurring higher health insurance costs due to uncertainty in Washington,’ said DOI Director Jennifer Hammer. ‘Insurers have been advised to apply the CSR uncertainty cost, solely to silver plans.’ This change makes it important that consumers diligently shop for a plan this year. DOI reminds consumers that cost alone may not be the only factor to consider when selecting a plan. For example, consumers may want to also consider a plan’s provider network.”
Anthem — 48.3 %
CareSource Indiana — 20 %
Celtic Insurance — 35.7
ABC 6 News: “University of Indianapolis’ Director of Public Health programs, Heidi Hancher-Rauch, said ‘uncertainty’ is the reason for rising costs. ‘Insurance companies are left trying to figure out, OK, if we aren’t going to get that money from the government, how are we going to make up that difference,’ said Hancher-Rauch. Another uncertainty is whether the requirement for everyone to get insurance will be enforced. ‘We rely on those healthy people who are paying into the plans to do that cost sharing among all of us,’ said Hancher-Rauch. ‘We absolutely need those healthy people paying into the insurance to help offset some of those costs for the older and sicker individuals.’”
Blue Cross and Blue Shield of Louisiana — 18.5 %
Vantage Health Plan — 30 %
Greater Baton Rouge Business Report: “Both Vantage and Blue Cross announced earlier this summer they would raise rates by double digits for those who buy insurance through the ACA exchanges. Vantage raised such rates by upwards of 30%, while Blue Cross increased rates by 18.5%.
The companies said the major driver of the rate increase was uncertainty over cost-sharing reductions, which are designed to help insurance companies offer affordable coverage to low-income people. President Donald Trump’s administration has threatened to stop paying the subsidies. Vantage and Blue Cross also cited a lax enforcement of the individual mandate, the provision of the ACA that requires everybody have insurance.”
Community Health Options — 18 %
Harvard Pilgrim — 27 %
Maine Public Radio: “Maine’s Insurance Superintendent Eric Cioppa approved rate increases that range from 20 to 37 percent if the cost-sharing payments end.”
Maryland Insurance Administration: “The rates do not include any factor based upon the political uncertainty of future cost-sharing reduction payments.”
Michigan Department of Insurance and Financial Services: The size of the increases this year is partially due to the uncertainty as to whether the federal government will continue to fund Cost Sharing Reduction (CSR) payments. Under the Affordable Care Act (ACA), insurers on the Marketplace are required to provide financial assistance under plans covering individuals up to 250% of the federal poverty level and eligible American Indians. The CSR payments allow insurers to meet that legal obligation without increasing rates. The President has indicated he does not support these payments, and the federal government is currently making them on a month-to-month basis.
Blue Plus — 2.8 %
Group Health — (2.5 %)
Medica — (.40 %)
PreferredOne — (38 %)
UCare — (13.30 %)
Wall Street Journal: “Mississippi’s insurance commissioner, Mike Chaney, said he is approving a 47.4% average premium increase for the state’s one ACA exchange insurer, which would have been around 17.9% if the cost-sharing payments were guaranteed. The insurer couldn’t bear the potential extra expense of funding the cost-sharing subsidies without the bigger premium bump, he said: ‘They can’t take that, they just can’t do it.’”
Washington Examiner: “Nevada’s insurance division did not disclose a reason for the price increases.”
Albuquerque Journal: “The state’s top insurance regulator said the rate increases in 2018 are heavily influenced by uncertainty about whether the federal government will block or discontinue payments to insurers. President Donald Trump has repeatedly threatened to halt these reimbursements to insurance companies in his drive to dismantle the Affordable Care Act, as Obamacare is formally known.”
New York Times: “In New Mexico, the average rate increase for plans sold on the state marketplace is about 30 percent. ‘Half of that increase is due to the uncertainty in Washington and the inability to lead,’ said John G. Franchini, the state insurance regulator. The four insurers selling policies in the state marketplace are offering more types of plans.
Premiums would decrease by 0.6 percent if CSR payments were paid.
ODI: “In addition, the average cost of coverage for individual plans sold on the federal exchange in 2018 will be 34 percent higher than the average cost of coverage in 2017. Approximately 11 percent of that increase is attributable to the assumption that insurers will not receive Cost Sharing Reduction (CSR) payments in 2018.”
BridgeSpan Health Company — (1.6 %)
Health Net Health Plan of Oregon — 5.5 %
Kaiser Foundation Health Plan of the Northwest — 14.8 %
Moda Health Plan — 4.7 %
PacificSource Health Plan — 2.8 %
Providence Health Plan — 10.8 %
Oregon Department of Consumer and Business Services: “Reasons for the rate changes include: The new Oregon Reinsurance Program. This program reduced individual market rates by 6 percent, and added a 1.5 percent increase to the small group market. Federal weakening of the individual mandate enforcement. This increased rates by 2.4 percent and 5.1 percent.”
Charlotte Observer: “A ‘cost sharing reduction’ subsidy reduces the amount that patients pay for deductibles and copays. About 20 percent of the 31 percent increase in premiums for S.C. residents is attributed to the uncertainty of funding for that subsidy, said S.C. Department of Insurance Commissioner Ray Farmer.”
Sanford — 7.5 %
Avera — 17 %
Argus Leader: “But insurance executives said political efforts to reform healthcare created the uncertainty that drove prices up in the first place.
Assuming President Donald Trump doesn’t move to eliminate cost-sharing reductions, policyholders will see a 7.5 percent bump under Sanford and 17 percent under Avera, executives from each group confirmed.”
Cigna — 36.5 %
Blue Cross Blue Shield of TN — 21 %
The Tennessean: “Uncertainty — wrought by the ongoing debate over Obamacare repeal-and-replace legislation and decisions by the White House and HHS officials — have clouded the premium request process, and led to higher requests. Cost-sharing reductions, a subsidy that offsets out-of-pocket costs for some shoppers, are divisive in Washington, D.C. There is no long-term commitment that CSRs will be paid to insurers, and the decision is being made monthly. BCBST attributes nearly all of its average 21 percent premium increase request to the unknowns of the upcoming year.”
TDCI Commissioner McPeak: “Instead, it appears more likely that Tennesseans must prepare themselves for a round of actuarially justified rates for 2018 that are far higher than could be necessary as a result of uncertainty in Washington. On behalf of Tennessee consumers, I continue to urge Congress to take action to stabilize insurance markets. The Department stands ready to take action to aid consumers should stabilization measures be enacted.”
Deseret News: “Just the general increase in medical trends that we’ve seen over the past decade — as the cost of services increase, premiums increase,” [Utah Insurance Department spokesman Steve] Gooch said. ‘There’s (also) an increase due to the uncertainty over whether the (cost-sharing payments) will be funded. So that causes some uncertainty in the risk profile, so that’s kind of built into those (new) rates.’”
BCBS of VT — 12.6 %
Addison County Independent: “If the cost sharing reduction payments were not continued, BCBS [which has 87 percent of the market] estimates premiums would go up by an additional 1.5 to 2 percent.”
Richmond Times-Dispatch: “As many see their options for health plans dwindle down to one insurer, premiums are simultaneously set to rise by an average of 57.7 % next year in Virginia’s individual marketplace…‘The rate increases can be attributed to an unstable market, with too few healthy people signing up to balance out the number of sick people who enroll, and the uncertainty of cost-sharing reduction payments, which are meant to go to insurers to cover the cost of offering lower prices to poor members, but which the federal government has refused to guarantee.’”
Washington Health Benefit Exchange Board: “Rates for the health plans certified represent a 24 percent increase over those available through the Exchange for 2017 coverage…However, should the federal government stop funding CSRs at some point in 2018, the OIC has determined that they may legally adjust the original lower rate to the approved higher rates of silver plans in the Exchange.”