Thousands of Mainers will see their individual health insurance premiums rise even higher in 2018 as a result of President Trump’s decision to eliminate federal reimbursement of a key Affordable Care Act subsidy.
However, Maine’s two remaining ACA insurance providers, Community Health Options and Harvard Pilgrim Health Care, said the White House’s move to eliminate cost-sharing reduction reimbursements to insurers would not prompt them to drop out of the marketplace entirely. They said the decision was expected, and that the state’s roughly 90,000 policyholders shouldn’t panic.
The average premium increase in Maine for individual buyers of mid-tier “silver” policies in 2018 will be nearly 50 percent, according to the state Bureau of Insurance. Community Health’s top executive said about two-thirds of that increase is directly attributable to the elimination of cost-sharing reduction reimbursements.
“Our silver rates went up by about 17 percent in the (original) filing, but they are up by about 50 percent in the unreimbursed filing,” Community Health President and CEO Kevin Lewis said. “That’s a 33 (percentage point) jump in premium.”
The average monthly premium for individual, on-exchange silver plans for a 45-year-old non-smoker in Cumberland County in 2017 was $424.44. In 2018, the average premium for a comparable plan will be $620.14 – an increase of 46.1 percent. That increase factors in the impact of Trump’s decision to eliminate the subsidy reimbursement along with other, unrelated factors.
According to The Washington Post, the White House confirmed late Thursday that it will stop making monthly payments to insurers for cost-sharing reductions, although it did not specify when. Two people briefed on the decision told the Post that the payments would be cut off as of November.
Cost-sharing reduction subsidies are designed to cover part of the cost of medical care for policyholders with household incomes up to 250 percent of the federal poverty level. They reduce the out-of-pocket costs associated with co-payments, deductibles and coinsurance payments for qualified policyholders.
The cost-sharing reduction subsidies only apply to holders of silver ACA policies. They differ from advance premium tax credit subsidies, which apply to holders of all types of individual ACA policies with household incomes of up to 400 percent of the federal poverty level. Advance premium tax credit subsidies will continue to be paid by the federal government and are expected to increase with the rise in premiums.
Insurers in Maine said eligible policyholders will continue to receive the cost-sharing reduction subsidies through their insurance providers in 2018. However, the federal government no longer will reimburse insurers for providing the subsidies.
As a result, insurers will raise premiums to cover the additional costs. For example, Harvard Pilgrim Health Care was planning to raise premiums for its individual bronze, silver and gold ACA plans by an average of 27.1 percent if the subsidy reimbursement continued. Now, it will raise premiums by an average of 38.3 percent.
ACA policyholders in Maine with household incomes up to 400 percent of the federal poverty level will continue to receive tax credits to offset the cost of their premiums and should not see a significant increase in their out-of-pocket costs, said Lewis, the Community Health chief executive. About 90 percent of Mainers who have individual plans under the ACA qualify for tax credit subsidies.
However, 10 percent of the state’s policyholders, roughly 9,000 people, are not eligible for the tax credits because they have higher incomes and likely would pay a lot more if they decide to enroll. Many small business owners with individual ACA plans in Maine fall into that category. Lewis noted that ACA small group plans for employees will be largely unaffected by the elimination of cost-sharing reduction reimbursements.
As a result of the premium increases, Lewis said Community Health expects more Mainers with individual plans to switch from silver to bronze plans in 2018. Bronze plans tend to be cheaper but provide less coverage.
Maine Insurance Superintendent Eric Cioppa released a statement Tuesday advising Maine consumers to consider changing plans as a result of the then-expected White House decision on cost-sharing reduction payments.
“The important thing for consumers to know is that because the CSR program has not been funded, silver plans might no longer be the best choice for many consumers, particularly those who are not eligible for CSRs,” Cioppa said. He advised consumers to carefully consider all the costs of a plan, including the premium, deductible, co-payments, coinsurance and any other out-of-pocket expenses.
Edward Kane, vice president at Harvard Pilgrim, said Maine insurers already were anticipating that cost-sharing reduction payments would cease and had priced their plans accordingly. For that reason, he said, Thursday’s confirmation by President Trump didn’t really change anything.
“I’m not saying they (policyholders) shouldn’t be alarmed by a rate increase,” Kane said. “I’m saying they shouldn’t be alarmed by this news.”
Lewis said Community Health already had priced its plans for 2018 with the assumption that cost-sharing reimbursements would cease. However, he noted that a lack of reimbursement for the remaining two months of 2017 would cause an unanticipated loss of revenue that had not been priced into the current year’s plans.
“We’re left holding the bag on a legal commitment to our members,” Lewis said.
Attorneys general of least a dozen states have said they plan to sue the Trump administration over the president’s decision to stop the reimbursement payments. Maine Attorney General Janet Mills does not plan to sign on as a co-plaintiff but supports the case, said her spokesman, Andy Roth-Wells.
Community Health has about 41,400 individual plan policyholders in Maine, and Harvard Pilgrim has about 20,800. Anthem has about 28,700 individual plan policyholders but is exiting the ACA marketplace in Maine. Both Community Health and Harvard Pilgrim expect to pick up a portion of Anthem’s ACA policyholders when open enrollment begins in November.
Average individual plan premiums in Maine have shot up more than 50 percent since the ACA was implemented in 2010, and they have more than doubled nationally.
J. Craig Anderson can be contacted at 791-6390 or at:
Twitter: @jcraiganderson
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