State regulators raise medical insurance rates; Move follows White House announcement that it will end subsidies to insurers

Maryland insurance regulators said Wednesday that they approved last-minute rate increases requested by health insurers for individual plans sold under the Affordable Care Act.

The Maryland Insurance Administration decided to consider rate rises after the Trump administration said earlier this month that it would no longer pay insurance companies subsidies that helped cover the cost of co-payments and other out-of-pocket expenses for low-income policy holders.

Plans sold by CareFirst BlueCross BlueShield and Kaiser Permanente of the Mid-Atlantic States will be affected.

The new rate rises only apply to consumers who buy silver plans on the state exchange under the Affordable Care Act, also known as Obamacare. Those who receive subsidies are required to buy these middle-of-the-road plans. About 96,000 Marylanders were expected to enroll in those plans this year, according to the insurance administration.

The insurance regulators said the majority of consumers who face rate increases will get a separate subsidy to offset the more expensive premiums. When their premiums rise, the second subsidy, called a premium tax credit, also will increase. Those who don't qualify for additional subsidies can shop around for another plan.

"Our goal was to minimize the impact on as many consumers as possible," said Insurance Commissioner Al Redmer Jr.

The commission approved higher rates for Kaiser plans than the insurer had requested and lower rates for CareFirst plans than it wanted.

CareFirst, by far the state's largest insurer, requested an amended rate increase of 60.1 percent for its HMO and was granted a 58.2 percent increase. The insurer requested an 86.1 percent rate increase for its PPO and was given 76 percent.

Kaiser asked for a 33.3 percent increase and was granted 43.4 percent.

CareFirst CEO Chet Burrell welcomed the resolution of the issue involving the elimination of the "cost-sharing reduction" subsidies.

"We regret that this issue had to be addressed at all - but we believe the outcome is fair to all involved," Burrell said in a statement. "Most particularly, we are concerned about our members who have bought Silver plans on the Maryland Exchange since they are the ones affected by this decision. However, they will receive higher premium tax subsidies that will largely offset the increase in premiums made necessary by President Trump's decision not to fund cost share reductions."

Bernard Tyson, chairman and CEO of Kaiser Foundation Health Plan Inc., said the insurer was pleased with the rate increase.

"While the administration's decision to stop funding cost sharing reductions introduced significant uncertainty and risk into the marketplace, Kaiser Permanente remains committed to striving for affordability, providing access to excellent care for individuals and families, and participating in the Maryland Health Insurance Exchange," Tyson said in a statement. "The newly approved rates reflect our assumed true costs of care for these members."

The advocacy group Consumer Health First had urged the insurance administration to require CareFirst and Kaiser to only increase premiums for silver plans sold on the exchange and to deny any request to modify premiums for bronze or gold plans or silver plans sold elsewhere.

"We are pleased Commissioner Redmer reached the same conclusion as this offers the greatest protection for Maryland consumers dependent on the individual market for health insurance," said Beth Sammis, a board member of the group, in a statement.

Sammis said it is more important than ever for consumers to explore plan options in detail, rather than choose an automatic renewal, once enrollment begins Nov. 1.

Some may find it more cost-effective to buy another level plan rather than a silver plan, she recommended. Consumers who do not qualify for a tax credit and decide a silver plan best meets their needs should purchase it off the exchange rather than pay the higher premium for the same plan on the exchange, Sammis suggested.

"We highly recommend that consumers seek professional assistance this year when making health plan choices by talking to an insurance broker or to navigators," she said.

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Credit: By Andrea K. McDaniels - The Baltimore Sun - amcdaniels@baltsun.com;twitter.com/ankwalker