ACA rates approved to increase for next year, new carrier added to marketplace

Premium rates for individual health insurance plans under the Affordable Care Act will increase by about 6% on average next year, but the Maryland Insurance Administration said this week that opportunities for savings remain.

Rates rose slightly less last year, with an average increase of about 4%. Marylanders, however, will continue to have some of the most affordable individual market rates in the country in 2025, the insurance administration said in a news release Thursday.

A new insurance carrier — Wellpoint Maryland — also was approved by the insurance administration to sell 10 plans both on and off the Affordable Care Act individual marketplace, bringing the total number of carriers to five. Regardless of where Marylanders live in the state, they will have the choice of at least four insurance carriers for next year, the release said.

The rates approved by the insurance administration are about 0.5% lower on average than originally requested by insurance carriers, saving state residents an estimated $6.4 million in premium costs, the administration said.

Next year’s rate increase was driven by an overall increase in the cost of claims, according to the insurance administration, which is charged with regulating the state’s $42 billion insurance industry. On average, the costs of prescription drugs rose 10.2%, physician costs rose 8.5% and hospital costs rose 4.3%.

In Maryland, federal and state subsidies that encourage younger and healthier residents to purchase insurance help keep costs low for everyone, the insurance administration said. About 80% of people who purchase their individual market plan on Maryland Health Connection — the state’s health insurance exchange — receive some reductions in premium costs through federal tax credits.

The state’s reinsurance program — a fund through which insurers are reimbursed for a portion of the costs from patients who require the most expensive care — also helps stabilize the market and keep rates low, the administration said. The approved 2025 rates are about 17% lower than they were in 2018, before the program began. The state’s waiver from the U.S. Centers for Medicare and Medicaid, which allows the reinsurance program to exist, is approved through 2028.

“The success of the Reinsurance program continues to be evident,” Acting Maryland Insurance Commissioner Joy Hatchette said in Thursday’s release. “Maryland premiums will continue to be amongst the lowest and most affordable in the nation.”

About 271,000 Marylanders will be affected by the approved rates next year, though overall costs and how much rates increased vary between plans.

A 40 year old living in the Baltimore metro region, for example, could pay anywhere from $41 per month more for the lowest cost silver plan than they paid last year — if they’re covered by CareFirst’s PPO plan — or $40 less, if they’re covered by Optimum Choice. Costs for the silver HMO plan from CareFirst, the No. 1 choice plan on the exchange from its dominant insurer, increased by $20 a month for the same person.

In Thursday’s news release, Hatchette advised Marylanders to work closely with health insurance agents and advisers when reviewing plans to make sure they take advantage of any opportunities to offset the costs of their premiums.

The insurance administration also approved an average rate increase of 0.3% for dental plans in the individual market, where about 96,000 Marylanders purchase insurance.

About 227,000 Marylanders are enrolled in small group market plans, which are geared toward businesses with 50 or fewer employees. Rates for these plans will increase by an average of 4.5%. More than 225 plans will be offered in the small group market this year.

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