Major health insurers in the Obamacare market say they may end up having to hike their prices unless they can get more certainty from the Trump administration about what the future will look like.
Insurers must decide by late June whether to participate in Obamacare’s exchanges next year in many states, and some already have submitted requests for massive rate hikes as companies look to protect against risky markets and the chance that President Trump will cancel protections built into the law.
Mr. Trump has threatened to withhold “cost-sharing” payments that reimburse insurers for low-income customers’ costs, seeking to use the money as leverage over Democrats who refuse to negotiate an overhaul of the 2010 Affordable Care Act.
Anthem, which requested a 34 percent increase in Connecticut, said if the payments aren’t guaranteed by early June, it will have to raise rates, trim its offerings or exit the Obamacare markets altogether.
Insurers seeking increases from Maryland regulators, meanwhile, cited Mr. Trump’s wavering commitment on the individual mandate requiring Americans to get insured or pay a tax.
“Failure to enforce the individual mandate makes it far more likely that healthier, younger individuals will drop coverage and drive up the cost for everyone else,” said Chet Burrell, president and CEO of CareFirst Blue Cross Blue Shield.
He said uncertainty played a “significant role” in his company’s request for average rate hikes of 50 percent in Maryland, 35 percent in Virginia and 29 percent in the District of Columbia.
Regulators will have the chance to reject those requests, so customers might end up paying less.
The uncertainty is just the latest shock for the health system, which is still adjusting to Obamacare. The law has failed to deliver on its promise of millions of young, healthy customers to offset the rise in sick, older patients who can no longer be denied coverage.
“Exchanges enrollees continue to have high health care needs, and many insurers are still experiencing losses in the market four years in,” said Caroline Pearson, a senior vice president at Avalere Health, a D.C.-based consultancy.
Enrollment in Obamacare’s exchange shrank from 2016 to 2017, she added, meaning “the hope for more enrollment by healthier people will not materialize, and plans need to price for a small, high-need market.”
Large players have quit the program, saying they can no longer absorb losses.
Aetna, which cut its participation to just four states this year, said Wednesday it will beat a full retreat in 2018 by yanking its offerings from Nebraska and Delaware — just weeks after it announced it was leaving Virginia and Iowa.
CareFirst said Obamacare extended coverage to those in need, yet losses from covering people with “substantial health care needs” in Maryland, Virginia and the District are expected to reach $600 million by the end of this year.
Policy analysts say it’s difficult to split blame for the increases between Obamacare’s underperformance and the new administration’s antipathy for the program.
“We don’t know what would have happened if things had turned out differently,” said Gary Claxton, a vice president at the nonpartisan Kaiser Family Foundation. “It’s hard to say whether that’s a new problem or an old problem.”
Democrats say Congress can stabilize the markets by offering more generous subsidies or a government-run plan to spur competition.
But Republican leaders say the law is permanently flawed. They want to replace Obamacare’s mandates and taxes — a levy on health insurers is set to return in 2018, driving prices even higher — with market-oriented reforms that entice people into plans.
“Just this week, we saw even more troubling news out of states like Maryland, where one major insurer just proposed a premium increase of more than 50 percent, warning that the Obamacare market is ‘in the early stages of a death spiral,’” Senate Majority Leader Mitch McConnell said Wednesday. “We saw similar stories out of Connecticut, too.”
The Connecticut Insurance Department said rate requests ranged from about 15 percent, from CTCare Benefits Inc., to Anthem’s request on the top end.
“While we are pleased that some steps have been taken to address the sustainability of the marketplace, the individual market remains volatile with significant uncertainty,” Anthem said in a statement.
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