‘Historic’ Rate Cuts for Maryland Individual Health Insurance Plans Detailed by CareFirst

BALTIMORE, Maryland, Sept. 21 -- CareFirst BlueCross BlueShield issued the following news release:

The Affordable Care Act (ACA) individual health insurance rates approved today by the Maryland Insurance Administration represent the first time in more than 20 years that CareFirst BlueCross BlueShield (CareFirst) has been able to offer across-the-board rate reductions for Marylanders purchasing individual coverage. The rates were announced earlier today by Maryland Governor Larry Hogan.

CareFirst offers both Preferred Provider Option (PPO) plans and Health Maintenance Organization (HMO) plans for purchase directly through CareFirst or through the Maryland Health Benefit Exchange (MHBE). For plans effective January 1, 2019, rates for PPO plans will be 11.1 percent lower than 2018 rates and HMO rates will be 17 percent lower. Individuals can enroll in 2019 coverage beginning on Nov. 1, 2018 and continuing through Dec. 15, 2018.

"This development is historic,'' said CareFirst President & CEO Brian D. Pieninck. "The extraordinary collaboration of the Maryland General Assembly and the Governor's Administration made it possible to create a reinsurance fund using a 1332 waiver through the Centers for Medicare and Medicaid Services. This program helped to enable CareFirst to lower individual rates and take a step toward more affordable coverage for Marylanders."

When 2019 Maryland rates were first filed in May 2018 - before the reinsurance program was finalized or approved - CareFirst proposed rate increases of 91.4 percent for PPO plans and 18.5 for HMO plans. CareFirst deemed those increases necessary to cover the costs of the pool of members covered under the ACA - a group that generally included far fewer younger, healthier individuals than the insured population at large. As the reinsurance program was finalized and further analysis of its anticipated effects on the individual market was conducted, CareFirst was able to adjust, refile and decrease its rates for all individuals in both the PPO and HMO plans.

"There is no doubt that this is - after years of increases - positive news for those seeking individual coverage in Maryland," added Pieninck. "There's also some additional good news just below the surface of today's headline. Individuals who have purchased PPO plans from CareFirst in the past may be able to buy nearly identical HMO coverage at a substantial, additional savings. We plan a coordinated outreach effort to make sure folks consider their needs and choices carefully during the upcoming individual enrollment period."

The benefits available through CareFirst PPO and HMO plans are comparable at the respective "metal levels" offered through CareFirst and the MHBE. In addition, the medical provider network is broad in both the PPO and HMO - with the HMO provider network representing 93 percent of all PPO providers. So, for many PPO members, it may be possible to switch to a substantially lower-priced HMO plan without losing access to their preferred medical providers.

Key benefits including deductibles, out-of-pocket payment maximums and copays for medical provider visits are the same in the HMO and PPO. There are some differences between the plan types, including requirements related to prior authorization and use of laboratory services. When open enrollment begins, CareFirst customer service teams, MHBE's statewide network of health insurance "navigators," and insurance brokers will be able to aid consumers in selecting the path that best meets their needs at the lowest cost.

"We recognize that many PPO members will opt to continue their coverage, especially since they'll be able to do so at a lower cost than last year," said Pieninck. "But we have an obligation to make sure our members understand their options, the benefits, and the associated cost."