Insurers on the District of Columbia’s Obamacare insurance exchange want to raise rates by nearly 15 percent in 2019, while Minnesota’s insurers propose to reduce rates by up to about 12 percent.
Insurers in Minnesota can take advantage of a reinsurance program in which the state helps subsidize the biggest insurance claims on Obamacare’s insurance exchanges. Efforts to create a federal reinsurance program ran aground in the Senate because of disagreements over abortion funding.
In Minnesota, all of the state’s five Obamacare insurers are asking for proposed rate reductions of 3 to 12 percent for certain plans. That is a major difference from the final rates for the 2018 coverage year, which ranged from a 16 to 32 percent hike.
Medica Insurance is seeking the biggest decline with 12.4 percent, followed by Blue Plus with 11.8 percent. PreferredOne Insurance is seeking the smallest decline of 3 percent.
Under Minnesota’s reinsurance program, the state offsets 80 percent of an individual’s total annual medical claim costs between $50,000 and $250,000, according to the state’s insurance regulator.
The state authorized up to $542 million for the program.
Meanwhile, D.C.’s three Obamacare insurers are seeking rate increases of an average 14.9 percent.
CareFirst Blue Cross Blue Shield is seeking an increase of nearly 10 percent, while Kaiser Foundation Health Plan of the Mid-Atlantic is seeking a 20 percent hike. The insurer Group Hospitalization and Medical Services sought an increase of 16.7 percent.
Kaiser blamed its 20 percent increase for 2019 on higher-than-expected expenses for next year. Group Hospitalization blamed a deteriorating risk pool, which refers to its group of enrollees.
If a risk pool does not have enough younger or healthier people to offset claims for sicker people, it can cause medical claims for insurers to spike, which drives an increase in premiums.
That has been a persistent issue for Obamacare insurers as a sicker-than-expected enrollee population signed up for insurance on the exchanges, which reside in the individual market that is used by people who don’t get insurance through a job or the government.
However, insurers in other states have said that the repeal of the individual mandate in Republicans’ tax legislation and moves by the Trump administration are making things worse and driving up premiums. For instance, insurers in Maryland are seeking rate hikes of up to 91 percent.
The administration is expected to finalize regulations this year that expand access to cheaper but lower-quality health plans. That could cause healthy Obamacare enrollees to flee the exchanges and worsen the risk pool, according to healthcare experts.
The rates for both D.C. and Minnesota must be finalized by this fall after negotiations with insurance regulators.
