Health insurers in Maine are again aiming to increase rates for Obamacare plans, with one company seeking an unprecedented 40 percent hike on average in 2018.
Insurers had until Friday to file their proposed rates for next year. The higher monthly premiums, if approved by insurance regulators, would affect about 80,000 Maine residents who buy coverage under Obamacare.
Even if regulators denied these specific rates, increases of some amount are almost certainly in the offing.
First, let’s run through each of the rate requests filed by the three insurers that sell Obamacare plans in Maine. Then we’ll delve into the reasons for the premium hikes.
Harvard Pilgrim seeks the largest rate hike by far, with plans to raise monthly premiums by 39.7 percent. That’s easily the biggest yearly increase any Obamacare insurer has pursued in Maine, though premium hikes are nothing new. If the state insurance bureau approves it, the average Harvard Pilgrim customer would see their monthly premium jump from $468.65 a month to $654.78.
That’s an average increase of nearly 40 percent, so some customers would get hit harder than others. The rate jumps would range from 22.3 percent, which is hardly pocket change, to a much steeper 122.8 percent.
About 21,000 Harvard Pilgrim customers would be affected by the rate increase, if they renew their health plans with the company.
Anthem Health Plans of Maine
Anthem proposed raising monthly premiums by 21.2 percent on average. While some customers would see their rates dip slightly, others would get hit with a price hike of up to 35 percent, according to Anthem’s filing.
About 28,000 Anthem customers would be affected.
Community Health Options
Under Obamacare, the government offered taxpayer-funded loans for the creation of health insurance “cooperatives,” which are run by members. The co-op insurer in Maine is Community Health Options, which was initially hailed as a success but has since struggled financially.
CHO, based in Lewiston, wants to raise rates by 19.6 percent, according to its filing. The minimum increase would be 15 percent, though some customers would face a 25.9 percent hike.
Roughly 33,000 CHO customers would be affected.
Those are the nuts and bolts of the new filings. So, why do insurers want to raise rates?
- All three expect the population they insure — people in the “individual market,” who buy health insurance themselves instead of getting it through work or government programs such as Medicaid — to grow sicker and older as a whole. The Trump administration has signaled that it won’t enforce Obamacare penalties for failing to buy insurance, and that means “membership is expected to drop, with the healthier individuals more likely to forego coverage,” Harvard Pilgrim wrote in its filing. That will leave largely sicker, older people who really need insurance, even if it’s expensive, as customers in the Obamacare market. With all the medical care they’re expected to need, insurers predict that they’re going to be costly to cover.
- There are indications that this trend is already happening. The insurers note in their filings that healthy people are beginning to skip insurance even now, leaving those that did buy coverage in 2017 significantly sicker, as a whole.
- Health care costs continue to rise. After leveling out in recent years, the costs for health care services such as hospital stays and outpatient procedures are expected to climb in 2018. High price tags for prescription drugs are also driving up costs.
The three insurers are assuming that their customers will continue to benefit from Obamacare subsidies that help them to afford their deductibles, co-payments, and other out-of-pocket costs. The future of those subsidies is very much up in the air, due to a lawsuit filed by the U.S. House of Representatives and congressional Republicans’ efforts to repeal Obamacare. The Trump administration has said it’s willing to keep paying the subsidies, though, and insurers are taking the government at its word — at least for now.
Anthem noted the uncertainty about the future of that funding, saying without it they might need to raise rates further, stop selling certain plans, or even stop selling Obamacare plans in some areas altogether.
In other parts of the country, that’s been a big problem, leaving some counties with no Obamacare plans at all. The fact that Maine’s insurers are asking to raise rates, even given the sticker shock, at least shows they plan to stick around in 2018.
The insurers can still submit changes to their rate requests through July 17. The Bureau of Insurance will hold public hearings on their proposals next month.