Earlier this week, Chicago insurers announced double-digit rate hikes for Obamacare plans, citing uncertainty in the Affordable Care Act’s future and political turmoil in Washington. These hikes could be just the beginning. Primarily concentrated in the individual market, where enrollees can purchase coverage privately and receive income-based government subsides, they exceeded estimates, ranging from 5.4 percent to 43.1 percent.
|Company Name||Product Name||Requested Rate Increase|
|Health Alliance Medical Plans, Inc.||Individual HSA Qualified POS – Individual – 20129IL030||43.09%|
|Health Alliance Medical Plans, Inc.||Individual HMO – Individual – 20129IL033||41.46%|
|Blue Cross Blue Shield of Illinois||BlueCare Direct – Individual – 36096IL095||38.21%|
|Cigna HealthCare of Illinois, Inc.||IL_IND_HMO – Individual – 53882IL004||37.65%|
|Health Alliance Medical Plans, Inc.||Indivdiual HSA Qualified HMO – Individual – 20129IL029||37.40%|
|Health Alliance Medical Plans, Inc.||Individual Point of Service – Individual – 20129IL034||36.96%|
|Freedom Life Insurance||EHBC-2015-IP-IL-FLIC – Individual – 82506IL024||27.43%|
|Freedom Life Insurance||IL EHB FLIC – Individual – 82506IL022||27.43%|
|Celtic Insurance Company||Ambetter + Vision + Adult Dental – Individual – 27833IL015||15.72%|
|Celtic Insurance Company||Ambetter – Individual – 27833IL014||15.31%|
|Blue Cross Blue Shield of Illinois||Blue Precision HMO – Individual – 36096IL081||14.45%|
|Blue Cross Blue Shield of Illinois||Blue FocusCare – Individual – 36096IL100||9.28%|
|Blue Cross Blue Shield of Illinois||BlueChoice Preferred – Individual – 36096IL099||5.43%|
Already concerning as is, these numbers are particularly worrying in light of President Trump’s recent veiled threats to cut cost-sharing reduction (CSR) payments, which he refers to as “bailouts for insurers.” CSR payments are federal funds used to reimburse insurers for covering low income enrollees. They began in response to Affordable Care Act (ACA) regulations which limited cost sharing (ie, co-pays and deductibles) for individuals with incomes below 250 percent of the federal poverty level. These payments have faced controversy in the past, primarily due to their questionable legality; they have been made directly by the president since ACA markets opened, instead of being appropriated by Congress, as is standard procedure. In fact, on July 30, 2014, the Republican-led House filed a lawsuit challenging the administration over CSR payments. So far, the rulings have favored the Republican Congress, but they have been appealed, and in the meantime, CSR payments have continued. Their survival is due primarily to their stabilizing presence; they have kept premiums lower for all enrollees and kept insurers satisfied and active in ACA markets across the country. But in light of the President’s recent tweets and open desire to see ACA markets “implode,” it appears their days may be numbered.
The impact of cutting CSR payments is hard to predict, but experts unanimously agree it would result in insurers raising premiums to account for the lost funds. Kaiser Family Foundation, a Washington-based think tank specializing in health policy, projected that premiums would rise by an average of 15 percent in states with expanded Medicaid like Illinois. This alone is a staggering figure, but in Chicago it could be a slight understatement, as a larger share of the individual market is lower income. According to data from the Centers for Medicaid and Medicare Services, 50.9 percent of Chicago enrollees qualified for CSRs in 2017, while only 46.6 percent of enrollees in expansion states nationwide qualified. In 2016, Chicago insurers were receiving around $5.4 million monthly in CSR payments, according to data from the Department of Health and Human Services, and while HHS has yet to provide data for 2017, given that Chicago’s enrollment numbers remain relatively stable it is likely that insurers received a similar amount this year as well.
While premiums are hard to predict, it has become increasingly clear that the uncertainty surrounding the ACA is having a serious impact on health insurance costs across the country. As the president remains uncommitted to continuing stabilizing measures like CSR payments, it is likely that the 216,000 Chicago residents enrolled in the individual market will face even higher costs than those announced on Monday. For now, they are forced to wait and see.
Pricing data can be found at healthcare.gov, CSR data can be found at HHS, and Enrollment data can be found at CMS. The image featured in this article is licensed under Creative Commons. The original image can be found here.