Amid uncertainty, state delays approval of 2018 insurance rates
The uncertainty about the future of national health policy reverberated in Massachusetts Wednesday when state regulators delayed approving insurance rates for individuals and small businesses that are set to kick in Jan. 1.
Typically, the Division of Insurance makes the rates public in mid-August. But this year, officials said they would wait until “sometime in September” to approve the rates, amid President Trump’s threat to end certain subsidies on which many insurers rely.
The subsidies, known as cost-sharing reductions, or CSRs, help offset deductibles and other out-of-pocket costs for lower-income consumers.
Without the subsidies — expected to total $132 million in Massachusetts next year — insurers would be forced to sharply increase their prices, they say.
“If the cost-sharing reductions go away, they would need to submit new rate requests,” said Chris Goetcheus, spokesman for the Division of Insurance.
Uncertainty around the future of the subsidies, which help about 155,000 lower-income Massachusetts residents pay for coverage, has made state officials and health insurers uneasy.
Trump has continued to slam the payments, a key element of the Affordable Care Act, even though Republicans in Congress have failed in their efforts to repeal and replace that law.
“We’re kind of reading the tea leaves and trying to understand,” said Lora M. Pellegrini, president of the Massachusetts Association of Health Plans. “There’s a lot of anxiety.”
The Congressional Budget Office on Tuesday projected that insurance premiums would soar if the subsidies ended. The CBO said government deficits also would rise, because the government would have to provide greater tax credits to help consumers pay higher premiums.
The state Division of Insurance approves rates for a portion of the commercial health insurance market that includes individuals and small businesses. These rates are one benchmark for the rate at which health care costs are rising.
While they put off releasing rates for 2018, state regulators on Wednesday detailed health insurance rate increases for the about 103,000 people who will renew their health plans Oct. 1. On average, these rates will increase 8.4 percent, but some insurers are raising prices much higher.
The largest increase is at Neighborhood Health Plan, where premiums will rise 18.1 percent. Blue Cross Blue Shield of Massachusetts, the state’s largest insurer, is raising rates for its HMO plan by 9 percent. HMO plans offered by Tufts Health Plan and Harvard Pilgrim Health Care each are rising 4.2 percent.
Blue Cross spokesman Gregory Winter said the company’s rate increase reflects the rising cost of medical care and prescription drugs, as well as costs associated with certain policies of the Affordable Care Act.
“We work hard to deliver more affordable premiums to our customers in a competitive market,” Winter said in an e-mail. “We recognize we have more work to do to make quality health care affordable. The rates reflect our disciplined approach to managing both our administrative and medical costs.”
Neighborhood Health also attributed rate increases to certain ACA programs and to changes in the number and health status of its members.
“In the fourth quarter, Neighborhood’s premiums remain highly competitive,” chief financial officer Joe Capezza added in a statement.