Virginia regulators approve break on Obamacare premiums

Virginians covered by Affordable Care Act policies will get a break they could have missed because of this year's $1 billion state budget impasse.

The double-digit percentage increases for next year that those Virginians had faced are no longer coming, the State Corporation Commission Bureau of Insurance said in response to a query from the Richmond Times-Dispatch.

The key was language deep in the 758-page budget the House of Delegates and state Senate finally approved last month, more than six months behind schedule.

It was a formal state commitment to back a program funded by state and federal money to hold down ACA, also known as Obamacare, premiums.

It set a target of a 15% reduction from where premium rates would otherwise be.

With that commitment in hand, the State Corporation Commission Bureau of Insurance won federal OK to continue the program.

"We've seen the ACA individual market in Virginia continue to improve in terms of increased carrier participation and competition in all areas of Virginia," Commissioner of Insurance Scott White said. "Insurance carriers are also predicting their highest enrollment in years.

"The decision by the General Assembly to continue the reinsurance program will have an impact by holding insurance rates in line for Virginia consumers," he said.

For the state's biggest insurer, Healthkeepers, which offers individual ACA coverage everywhere in Virginia, it means rates will decline 4.6% on average, instead of climbing 18.8%.

For the other insurer that offers plans across the state, No. 2 Sentara Health Plans, average rates will decline 3.1% instead of climbing 26.2%.

Average rates for the seven other insurers offering plans in the Richmond area will range between a decline of 0.5% to an increase of 8.4%, instead of the increases of 11.1% to 25.5% that they originally expected.

Three of the seven also offer plans in Roanoke and Blacksburg, where average increases now will range from 3.7% to 8.4% instead of 16,4% to 25.5%. The plan with the biggest average increase also offers coverage in Danville and Lynchburg.

The program that allowed the Bureau to approve the decreases and smaller rate increases uses state and federal funds — significantly more federal funds than state money — for a kind of backstop to cover part of the cost of health insurers' larger claims.

Without this so-called reinsurance, the Bureau forecast that ACA rates would rise by an average of 26.4% in 2024. Relatively modest rises in hospital costs and larger ones for prescription drugs pushed the total average increase to 28.5%.

The reinsurance reimburses health insurers for part of the cost of reimbursing health insurers in the Affordable Care Act's individual market for claims between $40,000 and a $155,000 cap, so that the insurers are out of pocket for 70% of the cost.