Notice of insurance rate hikes delayed two weeks in Virginia

Time is running out on expiring federal subsidies for health insurance, but Virginians won't know how much they'll pay in monthly premiums next year until the end of this month.

The Virginia Bureau of Insurance agreed last month to extend the deadline for insurers to notify their customers of premium rate increases from Oct. 18 to Oct. 31 "since the final approval of rates has been delayed due to changing federal rules that impact plan design and rates."

What that means for consumers in the individual and small group insurance markets is a two-week reprieve in sticker shock from new monthly premiums expected to cost, on average, 20.5% more than they're paying this year.

The delay also may be a temporary reprieve for President Donald Trump and the Republican-controlled Congress, who want to wait to find a solution to the expiration of enhanced federal tax credits at the end of this year.

They did not address the expiring tax credits in a stopgap spending resolution that Senate Democrats blocked on Tuesday, triggering a shutdown of the federal government.

Sen. Mark Warner, D-Va., expressed concern about the delay on Wednesday because consumers don't know yet what is about to hit them if Congress doesn't act now.

"For those who say, 'You can do that later,' well, notices go out for health care costs going up this month and people have to sign up next month," Warner said in a media briefing. "They won't sign up with the higher rates. These trains have to run in parallel."

Open enrollment for insurance plans on Virginia's Insurance Marketplace begins on Nov. 1 and extends through Jan. 30. Not everyone who buys insurance on the marketplace is eligible for subsidies, but they're all subject to individual market premium rates.

Doug Gray, executive director of the Virginia Association of Health Plans, said insurers had requested the delay because of the mismatch between federal and state deadlines for notifying consumers of rate increases, as well a delay in final approval of the rates by the Centers for Medicare and Medicaid Services.

But Gray said insurers fear the damage done by waiting to extend the subsidies for consumers who buy policies on the Virginia Health Insurance Marketplace.

"It's like a genie in the bottle," he said. "Once the genie is out, you can't get it back in. Once the (higher) rates are out, the enrollment will start to drop and only the sicker people will remain."

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"We need to get this addressed before the genie gets out of the bottle," Gray said.

The delay in notices for customers in the individual and small group insurance markets does not affect notices that will go out by the end of the month for people who buy their policies on the exchange. Those notices customarily go to customers by the end of October, said Keven Patchett, director of the Virginia Health Benefit Exchange, which runs the marketplace at the State Corporation Commission.

"Our bigger challenge is what are we going to put in those notices," Patchett said, "and when, if ever, the federal government is going to act."

Without the enhanced subsidies, the state exchange expects the average net household premium to increase by $692 a month for households earning 400% of the federal poverty level, which is $84,600 for a family of two or $106,600 for a family of three. Families at that income level would no longer be eligible for subsidies purchased on the state marketplace if Congress and Trump don't extend the enhanced premium tax credits.

At the lower end of the income range, the average net household premium will jump by $36 a month for a family of three earning up to $35,444 annually, or a 75% increase.

"This is going to be a mess," Gray said.