The unanticipated costs of providing health care to customers on the state’s online exchange has prompted large insurers to seek rate increases of up to 30 percent while one insurer decided not to offer individual plans at all.
United Healthcare, the nation’s largest insurer but a bit player in Maryland, was not included on a list released Friday by state regulators of companies seeking rate increases for 2017.
Insurance Commissioner Al Redmer confirmed that the company was leaving the exchange created under the Affordable Care Act, as it has in most states across the country. It will continue to offer plans in the small-business market.
United Healthcare would not comment on why it pulled out of the Maryland market, but it announced during an earnings call with analysts last month that it would only stay on exchanges in a handful of states as it tries to stem revenue losses directly related to marketplaces. The company said it lost $475 million on exchanges last year and could lose $500 million this year.
Its comments reflect what other insurers say they have experienced under Obamacare.
Many have complained that the plan, which requires all Americans to have insurance or pay a penalty, has pushed a sicker population onto the insurance rolls. Many of these previously unisured people might not have gotten proper care for years, so they are more costly to treat, the insurers say
Citing $100 million in losses in the individual market, CareFirst BlueCross BlueShield, Maryland’s largest insurer, persuaded state regulators to give it a 26 percent increase for plans this year. It said premiums did not cover the cost to provide services to patients.
Despite complaints from insurers, others say Obamacare has succeeded in getting people insurance.
“The ACA is for sure achieving many positive outcomes, and we can’t and shouldn’t go back,” said Dr. Jonathan P. Weiner, professor of health policy and management at the Johns Hopkins University Bloomberg School of Public Health. “Going back to where we were before would be far worse. However, that does not mean there haven’t been and will continue to be problems.”
Weiner said other factors have contributed to rising costs, including some overall growth in health care cost and utilization, mispricing of policies in the early years and the fact that federal government startup programs — which provided cost overrun protection to the plans — will expire next year.
For next year, CareFirst has asked the Maryland Insurance Commission for a 12.4 percent increase on its HMO plan and a 16 percent increase for two other plans it offers. The insurer said it had no comment on its requests for increases.
The insurance commission also will consider rate increases that other insurers requested for individual plans. Cigna Health and Life Insurance Co. requested a 29.8 percent increase, Evergreen Health Cooperative an 8.1 percent increase and Kaiser Foundation Health Plan of the Mid-Atlantic States a 25 percent increase.
Kaiser declined to discuss specific reasons for its rate request but said in a statement that it wants to keep premiums competitive and that it is willing to work with state officials to determine how to keep health coverage affordable.
“We are committed to offering the highest-quality care at the most affordable price points, and we are excited that increasing numbers of Maryland residents are choosing to experience the best of what we have to offer,” the company said.
Redmer said that the double-digit requests are not a surprise. He said it will take some time before a balance of healthy and sick people creates more balanced costs.
“We will continue to see this for a period of years until we have an equilibrium,” Redmer said.
The insurance commission will hold a hearing on the rate requests and expects to make decisions on them by early August, Redmer said.
The insurers will face opposition from consumers groups that say consumers can’t afford the rising prices.
The Maryland Women’s Coalition for Health Care Reform argues that a large portion of the state’s sicker population has enrolled in health plans already and that any newer subscribers are likely to be healthier. The coalition said insurers are overestimating growing health care costs. The group plans to do its own analysis of costs to present to the commission.
“We anticipate taking a really hard look at the justification for those increases and expect to be actively involved in the … review process,” said Leni Preston, the coalition’s chair.”They are not good for consumers.”
Advocacy group Maryland Citizens Health Initiative also said it will pay close attention to the process.
“We hope and expect the insurance commission to carefully review the proposed rates and make sure consumers are treated fairly and that the plans are adequately funded,” said Vincent DeMarco, president of Maryland Citizens Health Initiative.
The insurers also requested rate increases for plans in the small-business market that ranged from 0.1 percent to 7.4 percent.
Despite United Healthcare exiting the market, there are still options for Marylanders, said the head of Maryland’s exchange.
Carolyn Quattrocki, executive director of the Maryland Health Benefit Exchange, encouraged people to comparison shop to get the best plans. She also cautioned that the proposed rates are preliminary.
“I’m pleased that so many carriers continue to participate in the state’s health insurance marketplace so that Marylanders are able to choose from a variety of plans,” Quattrocki said.
