Washington – With uncertainty threatening the Affordable Care Act, states including Connecticut are making attempts — some more extensive than others — to keep insurers in their health care exchanges.
Some states, including Alaska and Minnesota, have used an Affordable Care Act provision to establish reinsurance programs to try to stabilize wobbly insurance markets. Arkansas and New Hampshire are trying to do the same thing. Under these programs states agree to cushion the impact of unexpected loses for insurers.
Washington state is considering establishing a state-based reinsurance program too — and offering insurers tax breaks to operate in rural areas.
Other states are wooing UnitedHealthcare and other insurers who have left ACA exchanges, including Connecticut’s, to try to convince them to return.
In Connecticut, the Insurance Department is giving insurers flexibility by allowing them to refile rates if a key Obamacare program known as cost-sharing reduction payments are eliminated by the Trump administration.
These payments lower the out-of-pocket costs for low- and moderate-income people and would bring insurers $7 billion this year. About 44,000 individuals in Connecticut benefit from lower co-pays and deductibles under the program.
But the Trump administration has not committed to continuing these payments. To Anthem and ConnectiCare, the two remaining insurers on Access Health CT, the state’s ACA exchange, the fate of the cost-sharing program will help determine if they continue to sell policies through Access Health.
“The Department has met with exchange carriers Anthem and ConnectiCare Benefits, Inc. and understands the importance of the continuation of the CSR payments and their impact on market stability,” said Katharine L. Wade, the head of the Connecticut Insurance Department.
Wade said the rates filed with the Insurance Department for the 2018 coverage year – which were an average of nearly 34 percent higher for Anthem and an average of more than 15 percent higher for ConnectiCare, are under review and were set with the assumption CSR payments will continue.
“The department has told the carriers, however, that if CSR payments go away, the department will ask the carriers to refile their rates,” Wade said.
The end of the program is expected to raise insurance rates by an additional 19 percent.
California allowed its insurers to file two sets of rates, one with CRS payments and one without.
Insurers are required to notify the federal government by June 21 if they intend to stay in the exchange and to advise Access Health and their customers of their decision by July 1.
But Anthem and ConnectiCare aren’t likely to have all the information they need to make that determination by then.
The Connecticut Insurance Department has scheduled hearings on their rate hike proposals on June 14, but isn’t likely to have a decision on whether to approve those rate increases – in part or in whole – for weeks after the hearing. The state allows five days after the rate hikes are approved – or disapproved — to leave the exchange. So the uncertainty of Access Health’s future could last all summer.
If both insurers leave the exchange, about 73,000 Connecticut residents would lose federal subsidies that help them buy insurance.
States go it alone
Kevin Counihan, who established and ran Access Health before the Obama administration tapped him to run the federal exchanges, said a big reason insurers in Connecticut – and across the nation – are proposing huge rate hikes is the perception the Trump administration will not enforce the ACA’s “individual mandate” that requires almost all Americans to be covered by health insurance. That mandate prods young, healthy people, who are less likely to voluntarily seek coverage, into insurer risk pools.
The Affordable Care Act repeal and replacement bill approved by the U.S. House last month, does not require people to purchase insurance. Counihan said 15 to 20 percent of the rate increases proposed by insurers for next year can be blamed on the government’s lack of enforcement of the mandate.
“Every state is very frustrated about the ambiguity and the lack of direction,” surrounding the cost-sharing program and the individual mandate.
Section 1332 of the Affordable Care Act allows states to apply for waivers that allow them to modify the requirements of the law.
Alaska applied for a waiver to set up its own reinsurance program after initial rate information in 2017 indicated premiums were projected to increase an average of 42 percent. With the reinsurance plan, which cost the state $55 million, the rates that were approved had an average increase of only 7.3 percent.
Minnesota also used a Section 1332 waiver to create a state-based reinsurance plan, and obtained federal funding to help pay for it.
Besides applying for federal help, cash-strapped states like Connecticut could also use money collected from state premium taxes to establish a similar fund, Counihan said.
“I would think that it’s something Connecticut should look at,” he said.
In March, Department of Health and Human Services Secretary Tom Price sent the governors of all 50 states a letter urging them to apply for Section 1332 waivers.
“State Innovation Waivers that implement high-risk pool/state-operated reinsurance programs may be an opportunity for states to lower premiums for consumers, improve market stability, and increase consumer choice,” Price said.
Juliet Manalan, press secretary for Connecticut Lt. Gov. Nancy Wyman, chair of the governor’s health care cabinet, said Connecticut did not apply for a waiver because it is considering other options.
She did not elaborate.
Meanwhile, insurers are continuing to leave ACA marketplaces. Anthem announced Tuesday it would no longer sell policies on Ohio’s exchange, which could leave 20 counties in that state without an Obamacare plan.