Rate increases averaging from 12 percent to 36 percent are on tap in 2018 for many Louisianians who buy health insurance through the federal marketplace amid the uncertainty of Republicans' efforts to dismantle Obamacare.
With the outcome in Congress unknown, insurers are factoring in proposed changes that they say inflate what would be single-digit premium increases into double-digits for 2018.
Roughly 93 percent of the Louisiana residents that had Obamacare plans in 2017 received some form of financial assistance from the federal government. For many of those people, much of the increase in premiums will be covered by greater federal financial assistance. Under former President Barack Obama's Affordable Care Act, as rates increase, so do federal subsidies.
Rate filings with the state Department of Insurance by Vantage Health Plan and Blue Cross and Blue Shield of Louisiana — the last of four insurers that originally offered federal marketplace plans in the state four years ago — say the 2018 premiums will vary depending on a variety of factors, such as age and location. Open enrollment begins Nov. 1 and ends Dec. 15.
Vantage Health Plan, whose individual plans cover 16,152 people, has filed for a 28 percent increase on average. Spokesman Billy Justice said there are two major reasons:
• It appears the federal government will dump an individual mandate that fines people who don't buy health insurance. Without that threat, fewer young, healthy people will enroll, and those customers help cover and reduce the costs for everyone else.
Vantage is already seeing this, Justice said. Not enforcing or dumping the individual mandate could drive up premiums nationally by 15 percent to 20 percent.
• Congress also appears unlikely to pay insurance companies to cover cost-sharing subsidies that reduce co-pays and deductibles for lower-income Americans. Instead, insurance companies will be required to foot the entire cost.
"Keep in mind these numbers are preliminary based on what the new health care law is going to look like. Had it not been for not enforcing the mandate or the possibility of cost-share reductions not being paid by the government, we would have seen normal trends of 7 percent to 10 percent increases," Justice said. "However we have had to prepare ourselves for the uncertainty in the market."
Blue Cross and Blue Shield of Louisiana spokesman John Maginnis said guaranteed funding for the cost-sharing reductions would have meant a single-digit increase on average for its 2018 plans.
Instead, Blue Cross filed rate increases ranging from 12 percent to 36 percent for five plans:
• Blue Saver, an average increase of 36 percent, covers 7,613 policyholders and dependents.
• Blue Max, average increase of 31 percent, 14,224 policyholders and dependents.
• Blue Connect POS, average increase of 17 percent, 20,138 policyholders and dependents.
• Blue POS, average increase of 15 percent, 57,602 policyholders and dependents.
• Community Blue POS, average increase of 12 percent, 9,685 policyholders and dependents.
If the federal government authorizes payments for cost-sharing reductions or makes other changes that would lead to reduced rates, Blue Cross is prepared to resubmit filings with lower rates, Maginnis said.
The 2018 rate filings posted so far include only those with rate increases of 10 percent or more, but those below 10 percent are expected to be added. The Louisiana Insurance Department does not have the authority to approve rates. The department can only review rates to determine whether they comply with laws and whether increases of 10 percent or more are justified.
Brian Burton, who heads the Southwest Louisiana Area Health Education Center, said the rate increases get the attention, but people forget that the subsidies go up, too, for the most part.
"Last year what we saw was even though the premiums went up, the subsidies went up with them so consumers didn't have to pay as much," Burton said.
Burton's organization helps educate consumers about enrolling in the marketplace.
However, B. Ronnell Nolan, president and chief executive officer of Baton Rouge-based Health Agents for America Inc., said the new rates will put insurance out of reach for many.
"Even with the tax credit or subsidy, they're not going to be able to afford it," Nolan said.
During the first two years of the Affordable Care Act, people might have paid $10 or $20 a month. But for 2017, the same people might have paid $100.
"So this is going to be even worse. Without knowing what's going to happen in Washington to help those folks, it's going to be 'saaad' in 2018," Nolan said.
Burton said it's true some consumers saw premium increases. People had to decide whether it was better to have lower premiums and higher out-of-pocket costs or vice versa.
But mostly consumers — especially those at less than 250 percent of the federal poverty level — who moved to more expensive plans took advantage of the cost-sharing reductions, he said.
For 2017, 143,577 Louisiana residents selected a marketplace plan, down from 214,148 in 2016. But after the state expanded its Medicaid program in 2016, more than 70,000 people eligible for marketplace coverage moved to Medicaid from Obamacare.
Insurers are offering ACA-compliant plans on and off the marketplace. For consumers who don't qualify for subsidies, the cost increases can be brutal.
This year, Baton Rouge retiree Robert Burns is paying about $1,000 a month for a Blue Cross plan, the result of a 40 percent rate increase.
Told of the proposed rate increases for 2018, Burns said he has no choice but to continue buying coverage. Nobody can go without health insurance, he said.
"If it's another increase, I'll just have to deal with it. At some point, none of us will be able to afford it," Burns said.
Freedom Life Insurance Co. of America was the only other insurer listed Monday by the insurance department to file a rate increase of more than 10 percent for individual plans. However, the plan covers only two people. One will see costs jump 99 percent, the other 204 percent.
When the online marketplace debuted in 2013, four companies offered coverage: Blue Cross, Vantage, the Louisiana Health Cooperative and Humana. Humana pulled out of the exchange following a failed merger with Aetna. The health cooperative — set up with federal funds to stimulate competition — failed in 2015. UnitedHealthcare entered the market in 2014 but has also dropped out.
Blue Cross has lost more than $200 million on Affordable Care Act products since 2014, Maginnis said. The proposed rate increases are necessary for the company to offer financially viable health plans.
"Our only alternative to raising rates would be to exit the marketplace, which many of our competitors have already done," he said.
Justice emphasized that the rate filings are very preliminary, and that some plans will offer average increases of less than 10 percent.
He is hoping that when politicians see the proposed rates, they will consider what they need to do to address the issues.
"Congress and the president need to pass something to stabilize the market, and from that point start improving the law each year," Justice said. "Anything that they pass, whether Democratic- or Republican-based, isn't going to be perfect for everybody. But if you look at what they have done with Medicare over the last 15 years, they have made improvements to it that have stabilized the market, giving Medicare recipients more choice and better benefits."
The filings from Vantage and Blue Cross echo the concerns of health insurers nationwide, who are filing ACA-compliant rates without firm direction from Congress. In other states, insurers' rate filings also have reflected the Trump administration's decision not to enforce the individual mandate and uncertainty about the future of cost-sharing subsidies.
Several firms say they will withdraw from the federal government's online insurance marketplace if the cost-sharing subsidies are not funded, according to Bloomberg News. In Maryland, Virginia and Connecticut, premiums on Affordable Care Act plans will climb more than 20 percent on average.
Meanwhile, uncertainty reigns in Washington, D.C. A revised version of the Senate health care bill included $70 billion to offset consumers' costs and a provision to allow insurers to sell bare-bones policies. On Friday, America's Health Insurance Plans and the national Blue Cross Blue Shield Association condemned the bare-bones policies.
"It is simply unworkable in any form and would undermine protections for those with pre-existing medical conditions, increase premiums and lead to widespread terminations of coverage for people currently enrolled in the individual market," America's Health Insurance Plans and the Blue Cross Blue Shield Association said in a letter to Senate Republican leader Mitch McConnell and Senate Democratic leader Chuck Schumer.
On Saturday, McConnell announced a vote on the bill would be delayed while Sen. John McCain, R-Arizona, recovers from surgery. McCain had criticized the latest version of the bill, saying he planned to offer amendments. McCain is one of at least three Republican senators who reportedly oppose the bill. The Republicans need 50 of their 52 Senate members to pass the bill.