Blue Cross and Blue Shield of N.C. wants permission to raise premiums by an average 22.9 percent on individual Affordable Care Act insurance plans for 2018.
The insurer said Thursday it has plans to cover all 100 counties — if it decides to offer the plans at all.
“Our filing does not guarantee our participation in offering plans,” said Brian Tajlili, the insurer’s director of actuarial and pricing services.
“The undecided future of the ACA makes it hard for insurance companies to prepare for 2018, and could impact whether or not Blue Cross NC can offer plans.”
The rate increase request was submitted last week to the N.C. Insurance Department, which can agree to, reject or reduce the rate increase. The department typically has 90 days to review a rate request.
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There will be a shorter open enrollment period between Nov. 1 and Dec. 15.
For 2017, the insurer initially sought an 18.8 percent premium hike for 2017, but wound up announcing in October a 24.3 percent increase after competitors exited the individual marketplace.
The state had the fourth highest enrollment rate for 2017 at 549,158, according to the U.S. Department of Health and Human Services. Blue Cross was the sole insurer in all but five counties in the Triangle. Blue Cross said in its request that it projects having 502,000 customers in 2018.
Blue Cross would offer 18 plans in 2018. The silver, or mid-range, plan was the most popular in 2017 at 78 percent, with the low-range bronze plan at 17 percent, and the high-end gold plan and the catastrophic injury plan at less than 3 percent each.
Most insurers are waiting to see how far the Trump administration and the Republican-controlled Congress will go with health-care reform initiatives that could end up gutting or ending the ACA. The biggest factor is the Trump administration threatening to end federal cost-sharing reduction payments for 2018.
Cigna HealthCare of N.C. filed for a 31.9 percent rate increase to cover a projected 21,396 customers in five Triangle counties.
The reductions, which serve as subsidies, help lower-income individuals buy plans with reduced out-of-pocket costs for medical care, such as lower deductibles and co-payments.
Lobbyists for the health insurance industry, American Medical Association, American Hospital Association and U.S. Chamber of Commerce have asked Trump and congressional Republicans to fully fund ACA subsidies.
However, Aetna, Anthem and Blue Cross Blue Shield of Kansas City already have announced they will curtail or withdraw 2018 ACA plans from states or counties.
Blue Cross said “the lack of funding for cost-sharing reduction payments drove the majority (60 percent) of the requested increase.” Without the uncertainty, the insurer said the average increase would have been 8.8 percent.
“We are still required to offer the additional cost-sharing reduction benefits to participate in the exchange, so covering these costs without (the federal subsidies) will drive up our average rate for next year,” Tajlili said.
The insurer said the return of the Federal Health Insurance tax accounts for 3 percent of the increase.
“It’s unfortunate that the Trump administration and Congress have chosen to create so much uncertainty about continuing that legally mandated payments,” said Mark Hall, a law professor at Wake Forest University who is a national expert on health care.
“That uncertainty puts insurers, like Blue Cross, in a real bind: either they set their prices for next year based on the assumption that the payments will continue, but risk having to either cancel coverage or impose substantial mid-year increases.
“Or, they go ahead and price their products assuming these payments cease, which results in a rate increase that is almost three times what it would otherwise be.”
Tajlili said that if the Trump administration provides more certainty about cost-sharing reduction payments, it could amend and re-file its request to reflect a lower rate increase.
Mitch Kokai, policy analyst with Libertarian think tank John Locke Foundation, called it interesting that ACA supporters “are trying to shift blame for rate increases to the Trump administration” since insurers raised rates before Trump was elected.
“One of the reasons many people supported Trump was because of his promise to get rid of the ACA,” Kokai said. “Trying to shift the blame to the Trump administration takes a lot of chutzpah.”
On March 1, Blue Cross reported a $38 million loss on ACA-related patient care for 2016 when including federal reimbursements, compared with a $283 million loss in 2015 and $123 million loss in 2014.
Most ACA-related losses are related to enrollees being older and sicker. They tend to require additional and higher-cost services, such as orthopedics, cardiology and cancer services, emergency room care and specialty drugs.
Tajlili said the insurer is “seeing the market begin to stabilize in 2017 after three years of coverage with a slightly older and slightly healthier customer, particularly those we picked up from other carriers.”
“So, it is trending in a direction consistent with other blocks of business.”