Insurers say they need big premium boost for ‘silver’ plans if ACA subsidy ends

This is a picture of Access Health's New Britain storeWashington –  ConnectiCare says it needs to hike the cost of popular “silver” plans sold on the Access Health CT for 2018 by more than 50 percent, and Anthem says it needs to increase its silver-plan premiums by more than 43 percent if the Trump administration ends a program that subsidizes out-of-pocket payments for low- and moderate-income Americans.

Last week, the Connecticut Insurance Department asked the insurers to refile rates based on the possibility that Affordable Care Act cost-sharing reduction (CSR) payments would end. These payments from the federal government allow insurers to cut out-of-pocket expenses for low- and moderate-income Americans.

More than 46,000 policyholders in Connecticut benefit from those subsidized out-of-pocket costs, which lower copayments and deductibles. Only those who purchase silver policies are eligible for this help.

President Donald Trump and congressional Republicans have criticized the CSR payments to insurers, which totaled about $7 billion nationally this year, as undeserved subsidies to the insurance industry. They refuse to commit to continuing the payments. That has resulted in uncertainty and instability in the individual insurance market, insurers say, and prompted them to leave Affordable Care Act state insurance exchanges.

ConnectiCare says it will need to raise rates an additional 34.1 percent over its previous premium increase request of about 13.5 percent for 2018 “silver” plans sold on the Access Health CT exchange if the CSR payments are eliminated. Because of the way the increases are calculated by the Connecticut Insurance Department, the total rise in the cost of a ConnectiCare silver plan would be 52.2 percent. The insurer sold more than 44,000 silver plans on the exchange this year.

Anthem says it would have to raise its premiums on the popular “silver” plans by an additional 16.7 percent above its previous request for a hike of about a 23 percent if the payments are discontinued. That results in a total rate hike of more than 43 percent for the insurer’s silver policies. Anthem sold nearly 17,000 silver policies on the exchange this year.

The Connecticut Insurance Department is reviewing all the rate hike requests, both for “silver” policies, the more expensive “gold” policies and the less expensive “bronze” plans.

Anthem, for example, has asked for a 50.8 percent rate increase for the already pricey – and comprehensive — “gold” plans it would sell on the exchange for the 2018 coverage period.

The Connecticut Insurance Department said it would make a decision on the rate increase requests before Sept. 15. It also said the insurers must decide whether they will offer plans on Access Health CT by Sept. 15.

The open enrollment period to purchase a policy for 2018 begins on Nov. 1.

Both Anthem and ConnectiCare have said they are considering quitting the exchange, based on uncertainty in Washington, D.C., over the CSR payments, the future of Obamacare as a whole, and the Trump administration’s uncertain enforcement of the individual mandate, a requirement that most Americans are covered by insurance, increasing the number of young, healthy people in insurance risk pools.

“Substantial uncertainty about 2018 and beyond is impacting the exchange markets both nationally and here in Connecticut,” ConnectiCare said in a statement. “There are many questions about who will be covered, what benefits will be required, and what subsidies and other financial support will be available to our members.”

The insurer said it is “closely monitoring developments so we can make the best decisions for our members and our company.”

Whether the Connecticut Insurance Department approves the rate hike requests will also factor into the insurers’ decision on whether to continue selling policies through Access Health CT.

If they don’t, there would be no way for Connecticut residents to get help with out-of-pocket costs or another ACA subsidy that lowers the cost of monthly insurance premiums for more than 70,000 residents.

Anthem said in a statement it would remain actively engaged with state regulators “until the time we are required to make our final decisions.”

After Congress returns from its summer break next week, the Senate Health, Education, Labor and Pensions Committee plans to hold hearings on ways to repeal – or reform – the Affordable Care Act.

On Wednesday, Access Health CT  joined eleven other state-based exchanges in a letter to the HELP Committee with suggestions on how to stabilize the individual healthcare market.

“In response to continued confusion over the future of the Affordable Care Act, I have been advocating for the specific things we can do to help bring stability to the individual health insurance marketplace, both on the state and national level,” said Access Health CT CEO Jim Wadleigh. “I’m pleased to join my colleagues from across the country in presenting our consensus approach.”

The suggestions included  “assured, consistent  funding of cost-sharing reduction (CSR) payments,” the establishment of a permanent federal reinsurance program that would limit the risk for insurers who sell policies on the state exchanges and “flexibility over the use of 1332 waivers.”

The Affordable Care Act allowed states to opt out of some of its requirements through the use of a “1332 waiver.”

Correction: This story has been updated with slightly higher percentage increases for “silver plan” rate requests based on new information provided by the state Insurance Department Friday. 

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