A deadline for insurers to file 2018 prices for health insurance sold through Affordable Care Act exchanges arrives Tuesday, but state regulators are still struggling to make decisions about pricing and coverage amid uncertainty in federal health policy.
The upshot is confusion in what is typically an orderly, regimented regulatory process for reviewing insurance offerings that will go on sale to consumers on Nov. 1.
States are taking different approaches, based on their best guesses about what Congress and President Donald Trump’s administration might do regarding the health-law marketplaces, though several state regulators said in interviews that they are leaning toward approving hefty rate increases.
According to actuarial firm Milliman Inc., at least 32 states have requested that insurers prepare alternative premiums for different scenarios, Most of those states are still holding off on a final decision on which rates to choose.
“The uncertainty makes it very difficult to navigate, and it’s not going away,” said Eric A. Cioppa, superintendent of the Maine Bureau of Insurance.
Insurer Anthem Inc. has said it would stop offering exchange plans under Obamacare, as the law is known, in Maine next year if the federal government stops payments known as cost-sharing reduction subsidies.
Those payments, which Mr. Trump, a Republican, has threatened to halt, reimburse insurers for money they advance to reduce health-care costs for low-income ACA enrollees.
A White House spokesman said the president “is working with his staff and his cabinet to consider the issues raised by” these payments. Anthem, which has already announced retreats from several exchanges, declined to comment.
After federal officials pushed back an earlier deadline, insurers are supposed to submit their rate filings for 2018 exchange plans to state and federal regulators by Tuesday. Regulators then have until Sept. 20 to complete their reviews and approve rates. Insurers are due to sign final federal contracts to offer plans by Sept. 27.
Some insurers said they are moving forward with plans to participate in the 2018 marketplaces but holding off on final decisions until the late-September cutoff.
“We’re keeping our options open,” said David Holmberg, chief executive of Highmark Health, which sells exchange coverage in Pennsylvania, West Virginia and Delaware. “There has to be a clear set of rules for 2018 for us to participate.”
Other big insurers, including Molina Healthcare Inc., have said they are still considering leaving more exchanges. Health Care Service Corp., a major exchange insurer, said in a statement it has filed proposed rates in all of the states it is serving that account for the uncertainty around the cost-sharing payments, but it “will make final decisions in late September” about the scope of its offerings.
A Senate committee is set to begin hearings Wednesday on legislation intended to stabilize the exchanges created under the 2010 law, which will be tough to pass in time to affect the 2018 marketplaces. Any bill is likely to include funding for cost-sharing payments.
The Congressional Budget Office estimates that if the payments end, insurers would decline to offer exchange plans in regions representing around 5% of the U.S. population next year and would raise premiums on average about 20% on the middle-tier “silver” plans. The cost-sharing subsidies are tied to silver plans.
Maryland’s insurance commissioner, Al Redmer, Jr., recently approved steep rate increases. But the rates didn’t include an extra bump for the potential loss of the federal cost-sharing payments, Mr. Redmer said. “The law is the law, and we have to assume it won’t change,” he said.
That could leave insurers in a squeeze, said Chet Burrell, chief executive of the state’s largest exchange insurer, CareFirst BlueCross BlueShield. If the payments stop when insurers haven’t accounted for the extra expense in their rates, he said, “the losses become very, very serious” and “that then threatens the viability of the market.”
Mike Kreidler, Washington state’s insurance commissioner, said he hasn’t made a final decision on rates, but he anticipates the cost-sharing payments will continue.
“I feel like I’m being a pessimist if I go in there and assume they’re going to yank the rug out from under us,” said Mr. Kreidler, a Democrat, who is slated to testify in Wednesday’s Senate hearing. “I can’t believe anyone would do anything so incredibly dumb.”
But several state regulators said they were reluctantly moving toward allowing insurers to raise rates by an extra margin to make up for the potential loss of the cost-sharing payments, if the payments weren’t guaranteed by Congress in the next few weeks.
“I would be afraid if I didn’t [approve an extra rate margin], the insurers would decide not to participate in the market,” said Julie Mix McPeak, Tennessee’s insurance commissioner, who is also testifying in the Senate hearing.
In Mississippi, insurance commissioner Mike Chaney, a Republican, said he too was leaning toward approving the extra increases if the federal payments remained up in the air. If the state’s lone remaining exchange insurer were trapped with the extra costs, without an offsetting increase in rates, he said, he fears that “next year I would not have a carrier at all who would market in the state.”
One key question is whether states and insurers will be able to alter rates if circumstances change.
Maryland’s Mr. Redmer said he would consider allowing an extra rate increase if the cost-sharing payments stopped. Mississippi’s Mr. Chaney said if he allowed rate increases because of the risk of losing cost-sharing payments, he believed he should be able to approve a rate cut in his state if the federal money does come through.
But other state officials said they didn’t believe the ACA allowed for rates to change once coverage has taken effect in January.
Asked about the potential for rate changes in the fall or next year, a spokeswoman for the Centers for Medicare and Medicaid Services, a federal agency, said insurers can’t change their rates after the Sept. 5 submission unless a state, through its rate-review process, requires a revised filing.
Write to Anna Wilde Mathews at firstname.lastname@example.org
Appeared in the September 5, 2017, print edition as ‘Insurers Face Deadline on Rates.’