The effects of Trump administration changes to the Affordable Care Act (ACA) exchanges are starting to become apparent as payers begin filing their 2019 premium rate proposals.
Cigna is proposing an average premium increase of 15% for its more than 100,000 ACA plan members in Virginia. The increases range between 6.4% and 40%. CareFirst BlueCross BlueShield is proposing a 64% increase for its 4,500 Virginia members. However, a third payer, Optima, is actually requesting a 5% decrease for 2019. There are four other payers expected to take part in the exchanges in Virginia next year.
There is a similar scene in Maryland, where CareFirst is proposing an average rate increase of more than 26%, with the biggest hike being about 91% for PPO plans, and Kaiser seeks a 37% bump. The rate proposals are still subject to approval and could change.
The hefty premium increases are not surprising. There are multiple reasons for the large increases and many of them are connected to changes made in Washington.
These changes include ending cost-sharing reduction (CSR) payments to insurers, killing the individual mandate penalty that required nearly all Americans have health insurance and the president’s proposal to expand short-term plans and association health plans (AHPs). Critics, including payers, charge that expanding short-term plans will cause more people to flee the ACA marketplace, leaving a sicker risk pool in the exchanges and requiring large premium increases to offset the further imbalance.
Alliance of Community Health Plans CEO Ceci Connolly recently told Healthcare Dive: “What’s happened is that several pieces of the puzzle have been pulled away. It is hard for me to isolate CSRs, what we are looking at now is a puzzle that is falling apart piece by piece… Losing the individual mandate, losing the cost-sharing reduction subsidies and losing any hint of reinsurance, not to mention the risk corridors that were already gone, you’re just running out of options to manage the cost of this program.”
Multiple reports this year warned how these changes will damage the ACA exchanges. The Urban Institute estimated that 2.5 million people will move from ACA plans to catastrophic plans next year. There were only 110,000 people in short-term catastrophic plans at the beginning of 2017.
The Urban Institute report also predicted that 6.4 million more people will be uninsured in 2019 because of policy changes, including ending the individual mandate penalty. The dire report estimated 32.6 million people wouldn't have health insurance in 2019, higher premiums in the individual market, fewer healthy ACA plan members and higher federal government spending to insure fewer people.
ACA advocates fear these changes will reverse coverage gains made over the past decade. The Commonwealth Fund's ACA Tracking Survey reported that the rate of uninsured people between 19 and 64 had already increased from 12.7% in 2016 to 15.5%.
The survey found 4 million people had lost coverage since March. That’s expected to increase. Commonwealth estimates that 5% of currently-insured adults will drop their coverage because of the individual mandate penalty repeal.
The results are similar to Gallup's findings earlier this year. At the time, Gallup said the percentage of uninsured American adults increased 1.3 percentage points during 2017, the largest single-year increase since Gallup and Sharecare started measuring the rate in 2008. That percentage represents about 3.2 million Americans who became uninsured in 2017.