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Individual Major Medical Premiums to Surge Next Year, Early Requests Show

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The first glimpse of what health-insurance companies plan to charge for individual major medical plans next year suggests there’s no relief ahead for consumers saddled with high premiums.

Several insurers in Maryland and Virginia are seeking double-digit percentage increases in monthly costs for individual medical plans in 2019. The largest increases are being sought by CareFirst, which wants to nearly double the amount it charges on average for one coverage option in Maryland, and raise the cost of another in Virginia by 64%.

Virginia and Maryland are the first states where 2019 rate requests have been made public. Increases are anticipated across the U.S. as insurers continue to grapple with the aftermath of last year’s battle to overturn key parts of the Affordable Care Act.

(Related: Individual Major Medical Plans Could Still Exist in 2019: Actuary)

Many health plans have stopped selling health coverage through the exchanges created four years ago under the ACA. The Republican-led attempt to change the health law last year caused premiums to surge, as insurers expected that undoing the law’s requirement that all Americans have health insurance would leave them with a smaller and sicker pool of clients.

The repeal effort ultimately failed, but the Trump administration overturned the penalty for going without insurance, and opened the door for insurers to sell cheaper, skimpier plans.

The rate requests must be approved by regulators and may change. Health plans will file requests in other states between now and late July. Final premiums will have to be approved ahead of the open-enrollment period beginning Nov. 1.

Seeking a Fix

In Maryland, CareFirst wants to raise rates by 91% on a plan covering 15,000 people, Insurance Commissioner Al Redmer Jr. said. If approved, premiums for a 40-year-old could reach $1,334 a month.

“We have folks in Maryland that are struggling, that are trying to do the right thing, and they’re paying more for their health insurance than they are for their mortgage,” Redmer said on a call with reporters.

Maryland is seeking permission from the federal government to create a reinsurance program that would use $975 million in state and federal funds over five years to lower rates. That would help only temporarily, Redmer said.

“I believe we’ve been in a death spiral for a year or two,” he said. A permanent solution requires Congress to fix the Affordable Care Act, he said.

Struggling Market

Virginia’s insurance market is struggling. In Charlottesville and some neighboring counties, ACA policies are the most expensive in the nation for people who don’t get government subsidies. The cost of a mid-level plan for a single 40-year-old is $1,048 a month.

Most buyers on the ACA exchanges receive subsidies that insulate them from premium increases. For those who don’t, the price of health insurance is increasingly out of reach. Bloomberg News has been chronicling the stories of the uninsured in a year-long project.

Carol Wise, a former nurse and social worker in Charlottesville who consults for nonprofits, paid about $640 a month last year for an individual plan from Anthem. When Anthem pulled out of her area, the only plan available, insurer Optima Health Plan, had a premium of $1,800 a month.

“I was blown away,” said Wise, 62.

Wise opted instead to join a health care sharing ministry for $280 a month, though the arrangement doesn’t offer the same protections as regular coverage. She pays an extra charge because of her high blood pressure, and has to consult monthly with a health coach.

The initial rates on offer aren’t likely to lure customers like Wise back.

Group Hospitalization and Medical Services Inc., which operates as CareFirst BlueCross BlueShield, wants to raise premiums by 64%, on average, compared with 2018 premium levels, according to documents filed with Virginia regulators on May 4. The change would affect more than 4,000 customers.

“We are deeply concerned that individual rates must rise as steeply as those filed, but this is needed to cover the cost of the population being served — which is generally far sicker than the average member in the community,” CareFirst Chief Executive Officer Chet Burrell said in an emailed statement.

The Kaiser Foundation Health Plan is seeking an average rate increase of 32% on about 79,000 members in Virginia, while Cigna asked regulators to approve a 15% increase, projected to affect 103,000 members.

Optima, which some Virginians have criticized for highest-in-the-nation premiums in some areas, said that on average its rates would decrease by 2%, and they would decline as much as 27% for some customers.

In Maryland, CareFirst’s larger HMO plan covering 123,000 people requested a 19% increase. Kaiser is seeking a 37% hike. Both would put the new rates for a 45-year-old above $500 a month, Maryland officials said.

Anthem Inc., which pulled out of many markets this year, is requesting a 6% increase for its HealthKeepers-branded plans in areas of Virginia where it remains.

Anthem declined to comment. Kaiser and Optima did not immediately respond to requests for comment.

“We’re still sky-high, and we still have a lot of concerns about the rates,” said Ian Dixon, a Charlottesville resident who has helped organize Virginians to press the state and Optima for lower premiums. Even with a drop around 30%, he said, Optima’s rates for 2019 would be about double what premiums in the area were in 2017, when Anthem and other insurers were still offering plans.

—With assistance from Hannah Recht.

— Read Aetna Exec Sees ACA Risk-Adjustment Death Spiral on ThinkAdvisor.

— Connect with ThinkAdvisor Life/Health on Facebook and Twitter.


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© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.