Health insurance filings reveal uncertainties

July 01--Applications for individual health benefit plan rates have been announced by the Kentucky Department of Insurance (DOI) showing increases by almost 35 percent for some individual plans.

DOI Commissioner Nancy Atkins blamed the increases as a reaction to continued policies under the Affordable Care Act.

"The health insurance marketplace has been ripe with uncertainty and instability since the implementation of Obamacare," said DOI Commissioner Nancy Atkins. "Year-after-year, Kentuckians are experiencing the fallout from bad policy, and the rate increases reflected in this year's filings are, unfortunately, commonplace for most states."

The DOI extended the filing deadline for insurers past the traditional May 17 deadline twice to the last possible federal deadline on June 21, but did not mention the ACA as a factor in its statement.

"The extension is required to allow issuers planning to participate in the individual market additional time to consider the current uncertainty regarding the annual appropriation of cost sharing reduction (CSR) payments in their rates," the DOI said in statement in May.

CSR payments refers to millions in subsidies the federal government pays to insurance companies under the ACA to keep rates low for low-income Americans. Congressional Republicans and the health administration of President Donald Trump have had mixed messages about whether those payments would significantly decrease, or continue at all.

Americans can receive CSR payments on a scale according to their income up to 250 percent of the federal poverty level. In 2015, a family of four at 250 percent of the poverty level received a subsidy of $60,625 on an ACA compliant silver plan. The federal government would reimburse the insurer at an appropriate percentage of the average cost for a specific population's medical expenses.

When insurer Anthem Blue Cross Blue Shield left 18 counties in Ohio without any plans on the individual exchange, the company cited the subsidies and political uncertainty as part of its reasoning.

"The Ohio individual market remains volatile and the lack of certainty of funding for cost sharing reduction subsidies, the restoration of taxes on fully insured coverage and, an increasing lack of overall predictability simply does not provide a sustainable path forward to provide affordable plan choices for consumers," Anthem said in a statement.

Dustin Pugel, research and policy associate at the Kentucky Center for Economic Policy, said insurers are rightfully nervous in their rate calculations given the uncertainty around policy.

"When politicians and policy makers suggest not paying the CSR subsidies, they are telling insurers you're still responsible for providing this care but we aren't going to help you," Pugel said. "Under those risk calculations, some of them would find pulling out as the best option."

Anthem Health Plans of Kentucky, the insurer with the highest individual plan increases at 34 percent, cited in its filing statement an insurer fee that had been postponed until 2018 and expected medical cost increases as contributors to the increase.

The company also said its rates were based on the assumption it would still receive the ACA subsidies and that rates could further increase or plans would be eliminated from certain areas if political uncertainty continued past June.

"Should [CSR subsidies] change or remain uncertain beyond early June, the proposed rates will no longer be appropriate at which time Anthem will withdraw and re-evaluate the current 2018 rate filing and market participation in light of the increased uncertainty or volatility in the market," Anthem said.

Anthem covers every county in the commonwealth and singularly insures 59 of 120 counties. After Humana left in February, CareSource is the only other provider on the individual ACA market.

Anthem said in their filing statement that about 69,500 people will be affected by rate changes.

Some critics of the ACA such as commissioner Atkins, who was appointed by Governor Matt Bevin in April, have pointed to these increases as evidence of the system's inherent failure. Pugel said the current injecting of uncertainty by policymakers into a business that operates on calculating risk is similar to engineering those results.

"The biggest takeaway is we still have an insurer in every county, it's still health plans low income people can afford but continued sabotage could completely change that," Pugel said.

The rates filed are only applications and are still waiting to be approved by the DOI before taking effect at the beginning of next year. National policy changes could result in insurers changing their filings.

All rate percentage increases, summaries and public documents submitted to the DOI can be found at http://insurance.ky.gov/ratefil/default.aspx.

Jacob Dick, 270-228-2837, jdick@messenger-inquirer.com,Twitter: @jdickjournalism

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