Marylanders in Obamacare individual market poised to see rate drop thanks to reinsurance
The two providers active on the insurance exchange for individual plans in the state, CareFirst BlueCross BlueShield and
CareFirst is now proposing a decrease of 22.3 percent and Kaiser a 7.8 percent drop in their health maintenance organization plans. The decreases would affect about 250,000 people in the individual market, in particular the roughly half of them who receive no federal assistance with their premiums.
The declines would follow several years of steady increases in rates on the individual market, which serves people who don't have insurance through their employers.
The change is the result of a reinsurance plan passed by the Democratic-controlled legislature with the support of Republican Gov.
"This is exactly the way we envisioned it," said Sen.
"For the first time in memory, insurance providers are proposing to lower rates for consumers, which is incredible progress toward our administration's goal of making health care more affordable for all Marylanders," said Hogan spokesman
The decreases need the approval of the insurance administration, which will hold a hearing Monday on the requests.
She said the decision will probably be announced by the end of next week.
A CareFirst spokesman declined to comment and a Kaiser spokesman could not immediately be reached.
The advocacy group Consumer Health First urged Insurance Commissioner
Consumer Health First said CareFirst, in particular, has a large surplus and is expected to receive a
In addition to the HMO decrease, CareFirst is proposing a 17.7 percent increase in premium for its
The lower HMO rates follow the Trump administration's decision to approve a waiver for
Hogan announced that decision last month, along with House Speaker
Under the plan, the state decided to keep in place a tax on health insurance carriers that
Middleton, a
He said the company,
"That would have been catastrophic," Middleton said.
He said people who lost their plans as a result would have had to turn to emergency rooms for health care, driving up hospital bills for all Marylanders.
Ratner said the reinsurance scheme is not a permanent fix. He said new funding sources will likely be needed after about two years, even though the federal waiver is good for five.
If the reinsurance plan works as well as expected, Ratner said, any additional costs may be minimized by the the prospect that lower rates will draw in younger, healthier purchasers to a pool with a disproportionate number of people with health problems. In turn, that could draw in additional carriers, Middleton said.
"The more people you have in the pool, the more stability you'll bring to the exchange," he said. "The more people you have in the market, the more competition you have and competition is what drives the efficiencies you need."
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