OHIC expects double-digit health insurance rate increases

PRELIMINARY ESTIMATES see health insurance rates in the Rhode Island individual market rising between 13.5 percent and 20.3 percent over 2017 due to the elimination of Cost Sharing Reduction subsidies. / BLOOMBERG FILE PHOTO/ANDREW HARRER
PRELIMINARY ESTIMATES see health insurance rates in the Rhode Island individual market rising between 13.5 percent and 20.3 percent over 2017 due to the elimination of Cost Sharing Reduction subsidies. / BLOOMBERG FILE PHOTO/ANDREW HARRER

PROVIDENCE —  The R.I. Office of the Health Insurance Commissioner reported that preliminary estimates of individual market health insurance rates see insurance premiums increasing between 13.5 percent and 20.3 percent over 2017 due to President Donald Trump’s executive order cancelling Cost Sharing Reduction subsidies.

The entire individual market includes more than 45,000 Rhode Islanders. Over 30,000 of those with individual market insurance obtain their plans from the Affordable Care Act marketplace exchange. The elimination of CSRs is expected to impact the entire individual health plan market.

Cory King, principal policy associate at OHIC, said eliminating the CSR subsidies will increase individual rates for Neighborhood Health Plan of Rhode Island plans in HealthSource RI by an average of 13.5 percent over 2017 rates, and at Blue Cross & Blue Shield of Rhode Island by an average of 20.3 percent.

Those increases would have been greater if not for OHIC’s direction to insurance companies to make up the bulk of the lost CSR payments by increasing each insurance company’s silver plan rates, King said.

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Those increases affect 17,000 Rhode Islanders, but will be wholly or partially mitigated by federal subsidies. Silver plan rates will rise an average of 19.5 percent among the 10 HealthSource RI silver plans at Blue Cross, King said.

At Neighborhood Health, the average increase on the company’s four silver plans was 18 percent, mitigated in part by adjusted risk assumptions for August, which required the company to pay out less than anticipated that month, King said.

The federal government is legally required by the ACA to limit premiums for low-income families, who make up most silver plan customers, to less than 10 percent of those families’ income said Marie L. Ganim, R.I. Health Insurance Commissioner. So they won’t feel the full impact of those increases.

About 1,400 Rhode Islanders in higher-income brackets who signed up for 2018 silver plans will need to move out of those plans, either into a lower-cost plan or out of the state exchange entirely, to avoid the increase.

The move comes two weeks before Americans start signing up for 2018 coverage Nov. 1 through Dec. 17, and coincides with a bipartisan Senate deal in the works to temporarily restore Cost Sharing Reduction subsidies Trump canceled by executive order last week. The order set state and federal officials on missions to work around the order and render it moot.

“Because of President Trump’s irresponsible decision to defund CSR payments, premiums for silver plans in Rhode Island will rise,” said Zachary Sherman, director of HealthSource RI, the state’s health insurance exchange.

 

Sherman said Rhode Island’s fixes will likely be in place for some time, despite best efforts in Congress.

“We support efforts by Congress to guarantee funding for [CSRs], and to take additional measures to stabilize markets. These efforts could go a long way toward preventing the damage that President Trump is doing to markets here in Rhode Island and nationwide. At this point, though, success in passing a bipartisan stabilization bill is far from a sure thing, so we are focused on dealing with the negative implications of defunding CSRs. HSRI is working to implement contingency plan rates and give our customers the best information we can as quick as we can. Even for customers that will see significant premium increases as a direct result of President Trump’s actions, we want to help them understand their options, because there might be alternative plans that will save them money,” Sherman said.

Rob Borkowski is a PBN staff writer. Email him at Borkowski@pbn.com

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