Lower prices for health insurance? Obamacare exchange insurers propose rate decreases

Aug. 23--Illinois residents who buy health insurance on the Obamacare exchange will likely see rates fall slightly or hold steady next year -- even as fewer consumers turn to the exchange for coverage and the Trump administration battles the law behind it.

The state's largest insurer, Blue Cross and Blue Shield of Illinois, plans to decrease rates by an average of 0.02% across its exchange plans. Celtic Insurance Co. plans to bring down its rates by an average of 0.07%. Cigna HealthCare of Illinois also is proposing an average decrease, although spokeswoman Holly Fussell said she could not provide a specific amount.

Most people in Illinois get health insurance through their employers or through government programs such as Medicare or Medicaid. But each year, hundreds of thousands of Illinois residents buy insurance through the exchange, created under the Affordable Care Act, also known as Obamacare.

Rates are expected to be finalized in coming months, and consumers can start shopping Nov. 1 on healthcare.gov for insurance plans.

It is the second consecutive year that insurers have proposed lower rates. The proposed price changes are a far cry from the double-digit increases many of the same insurers imposed just a couple of years ago.

Stabilized prices, however, haven't stopped consumers from leaving the exchange.

About 288,000 Illinois residents paid for exchange coverage as of February, according to the federal Centers for Medicare & Medicaid Services. That was down by about 6% from February 2018. Nationally, the numbers were down by less than 1%.

The Trump administration has noted that many of those who left the exchanges between 2016 and 2018 were people who didn't receive tax credits to help them offset the cost of monthly premiums.

In Illinois, average monthly premiums cost $645.05 as of February, though about 87% of people on the exchange in Illinois received tax credits. The average tax credit in Illinois was about $524 a month as of February.

It's true that many people who didn't receive the tax credits left the exchanges between 2016 and 2018, when prices were at their highest, said Katherine Hempstead, a senior adviser at the Robert Wood Johnson Foundation. But now that prices are leveling out, she said it's possible fewer people will exit the exchanges.

It's also possible that exchange enrollment is dropping because low unemployment rates have meant more people have insurance through employers, she said. Also, fewer people might buy exchange plans because the Trump administration eliminated the requirement that everyone have insurance or pay a penalty, and because the administration expanded short-term plans offered off the exchanges.

Uncertainty surrounding the law's fate in recent years may have deterred people from signing up, said Graciela Guzman, coalition manager of Protect Our Care Illinois, a coalition of groups working to protect the Affordable Care Act and Medicaid in Illinois. The federal government also has cut funding for outreach and assistance meant to help people enroll, she noted.

Despite the dips in enrollment, rates have likely been dropping partly as a response to the high prices of years past, Hempstead said.

The insurance companies "remaining in the market were able to charge quite a bit and made a lot of money and I think that's encouraged a lot of competition and entry," Hempstead said. "Because of that, I think we're seeing that everyone is trying to be competitive with their rates."

Blue Cross, in a filing with its proposed rates, said its proposals are based on demographics, administrative expenses and changes made by the Trump administration, such as the elimination of the penalty for not buying insurance, and the expansion of short-term plans. Past experience and market conditions are also factors, Blue Cross spokeswoman Colleen Miller said in an email.

Individual Blue Cross plans will continue to be available in every county in the state next year, she said.

Cigna initially said it would raise rates by an average of 5.8% next year, but Fussell said Friday that the insurer is now expecting rates to decrease. Historical trends, medical costs, product changes and overall market performance are factors in the changes, Fussell said.

Much of Celtic's explanation for its lower rates was redacted from its filing, and an attempt to reach Centene Corp., Celtic's parent company, for comment was unsuccessful Friday.

A fourth insurer, Health Alliance Medical Plans, is proposing a 4% average decrease next year, though that company offered plans mostly outside the Chicago area this year.

A fifth insurance company, Unity Health Plans Insurance Corp., also known as Quartz, is proposing an average 5.3% increase but will only offer plans in Boone, Ogle, Stephenson, Winnebago, Jo Davies, Carroll and Lee counties, spokeswoman Jennifer Dinehart said in an email.

The Illinois Department of Insurance plans to publish more information about the exchange plans in coming months. The department reviews rates, but insurance companies do not need the state's approval to move forward with them.

This year, for the first time, healthcare.gov will also include a rating of each plan's quality.

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