Wyoming residents insured under Obamacare to see rate increase

Aug. 13--CHEYENNE -- Uncertainty surrounding federal health-care policy is likely to drive up the cost of health insurance for Wyoming consumers with policies through the federal health exchange in 2018.

On Sept. 15, Blue Cross Blue Shield of Wyoming, the state's only insurer on the federal marketplace, is expected to announce its final rates for 2018. Preliminary rates announced Aug. 1 indicate significant increases are likely for individuals receiving financial assistance or federal tax credits, as well as for those who don't qualify for assistance.

Additionally, the Small Business Health Options Program, or SHOP, designed to help small businesses provide insurance plans for their employees with tax credits, will no longer be available in Wyoming in 2018.

Blue Cross Blue Shield put in a request with the Center for Medicare and Medicaid Services to set rates for those with plans eligible for federal assistance 48 percent higher, on average, than current rates. Those with plans on the exchange who do not qualify for assistance would see rates jump by more than 38 percent, on average, if the request is approved.

After attempts by Republicans in the U.S. Senate to repeal and replace the Affordable Care Act, commonly known as Obamacare, failed, it's uncertain where federal policy will go next. But President Donald Trump has repeatedly suggested he may let Obamacare "implode." With that, many fear the federal government might not fund cost-share reductions, or CSRs, which lower out-of-pocket costs for those with plans on the Obamacare marketplace.

Wendy Curran, a representative of Blue Cross Blue Shield, said the uncertainty is a critical factor in the request to raise rates.

"Much of the discussion in Washington, D.C., has to do with whether or not certain financial programs, particularly CSRs, will be funded," she said. "So we've opted, like many other insurance companies, on the side of being conservative and cautious, and to set rates as though those CSRs won't occur."

More than 28,000 Wyomingites were insured through the exchange as of March, with 70 percent qualifying for subsidies, Curran said. Fifty-eight percent of that population is eligible for cost-sharing reductions, a higher tier of assistance, she said.

It's important to point out, Curran said, that not everyone with plans on the exchange are going to feel the full effect of the anticipated hike. That is because the premium rate increase will likely be offset by subsidies. The people who will really feel the increase are those who do not qualify for premium assistance.

"I think (those who receive assistance) will see some level of increase, but it may be offset by assistance they receive, so it will be far fewer dollars than a 48 percent increase," Curran said. "There will be people who don't qualify for assistance that will be hit with a pretty hefty rate increase, we assume."

Individuals with plans that receive assistance could see a minimum increase of more than 25 percent, with a maximum exceeding 83 percent. Those not receiving assistance would see a minimum increase of more than 27 percent, with a maximum of more than 45 percent.

Age is the key variable when it comes to whether a rate increase will be higher or lower, according to www.healthcare.gov. Young adults are likely to be on the higher end.

"A 20-year-old with single coverage would see an increase significantly greater than the average increase for their plan," according to the federal government website.

Another factor, Curran said, is that Blue Cross Blue Shield of Wyoming experienced a loss ratio of more than 100 percent in 2016. She said the insurer is expecting revenue losses to continue to worsen.

"The claims we paid exceeded the premiums we collected for this population in 2016," she said. "They used up more health services, and the costs are high for health care in Wyoming. They ended up using more services than we predicted, so the premium we took in didn't match the cost we had to pay."

That is partly because those who did not have health insurance before Obamacare became law -- often because of preexisting conditions that made them uninsurable -- likely used more health services than healthier people. It was assumed the latter's premium payments would offset the former's, Curran said.

"People may have had chronic illnesses that went untreated, which kind of pent up demand for those people to get back on track with health maintenance," she said.

SHOP plans to end

Starting in 2014, Blue Cross Blue Shield of Wyoming started offering SHOP. Under the plans, businesses with fewer than 50 employees could apply for tax credits against the cost of insurance.

It was a federal requirement at the time that insurers offering individual plans on the marketplace offer SHOP, Curran said. However, she said the program never took off in Wyoming.

"At Blue Cross Blue Shield, we had less than 1 percent of small businesses that participated in SHOP," she said.

Curran said she heard that applying for the program through the www.healthcare.gov website was too cumbersome and complicated for consumers to navigate, which likely led many to avoid the process.

"The process of applying for small business tax credits, I also understand, was burdensome," she said. "I don't think very many who participated actually pursued the tax credit or successfully completed the application."

The requirement insurers must offer SHOP when offering individual plans is no longer part of federal policy, Curran said. That, combined with the program's lackluster popularity in Wyoming, led to the decision to no longer offer SHOP.

"It was decided that it affected so few people with such a cumbersome process that we would focus efforts on direct small business coverage," she said.

D.C. to blame?

Ultimately, Curran said it comes down to the uncertainty around what will happen in Washington, D.C., with regard to health-care policy.

"We are as sorry about this as anyone. We'd like nothing more than to have direction from Congress, no matter what it was, so to have the stability to say, 'This is where we will be, this where our rates will be,'" she said. "Instead, we've had to plan for the worst."

Enroll Wyoming, which provides information to residents about the Affordable Care Act, plans to continue its work to help consumers enroll in the marketplace in 2017, said Monica Jennings, an Enroll Wyoming spokeswoman.

"Right now, the law still stands, and that's our main focus," she said.

This year's open enrollment period is significantly shorter than the previous year's. Enrollment begins Nov. 1 and ends Dec. 15, whereas it stretched to Jan. 31 for the previous year's enrollment period. Each year, she said, there's been an increase in the number of Wyomingites enrolling in plans on the federal marketplace.

As in previous years, Jennings said the Enroll Wyoming team is planning to go out into communities around the state to try to continue that trend.

"We're aggressively being proactive," she said.

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