Individual Obamacare rates set to increase by 30 percent in Pa.
Changes that President Trump has made to the Affordable Care Act's marketplace are driving a 30 percent increase in individual insurance premiums in Pennsylvania, a much bigger jump than the 8 percent increase that had been anticipated.
Trump announced last week that the federal government would no longer pay insurers to cover costs of certain benefits the health law provides to policyholders with the lowest incomes. Those benefits — lower deductibles and smaller doctor's bills — will remain in place, so insurers are covering the costs by raising premiums.
“We have a federal government right now that is not upholding their end of the bargain,” Acting Insurance Commissioner Jessica Altman told reporters Monday.
Trump said Monday that “Obamacare is finished. It's dead, it's gone. It's no longer — you shouldn't even mention it.”
In Western Pennsylvania, UPMC Health Plan is increasing rates an average 41 percent, while Highmark Inc. is increasing rates by an average 25 percent, according to rate filings . UPMC Health Plan had requested an average increase of 8 percent, while Highmark had requested an average increase of 20 percent. Anticipating Trump might eliminate the payments, the insurance department asked insurers to prepare alternative rate proposals, which the department approved after last week's announcement. The annual open enrollment period for the plans runs from Nov. 1 through Dec. 15.
Most people won't pay the full approved increases because of the way prices are structured in the marketplace, Altman said.
The federal government provides other subsidies — different from the payments to insurers eliminated by Trump — that lower premiums based on policyholders' incomes. So for a person whose income doesn't change, the government will pay most of the rate increase.
The Congressional Budget Office, an independent federal agency that evaluates policy costs, has estimated Trump's change would increase deficits by $6 billion in 2018, $21 billion in 2020, and $26 billion in 2026.
The cost-sharing reductions were part of the 2010 Affordable Care Act. House Republicans sued the Obama administration over the reductions in 2014, saying the executive branch didn't have the authority to spend the money each year. A district court judge ruled in favor of the House, and the Obama administration appealed the decision; however, Trump took office before a higher court took up the case.
Trump's decision to end the payments follows months of failed attempts by Republicans in Congress to repeal the Affordable Care Act, which they had vowed to do throughout the Obama administration. The House passed a repeal plan, but the Senate could not garner enough votes in several attempts.
Congress could restore the cost-sharing reduction payments through legislation.
The approved rate increases in Pennsylvania factor in uncertainty surrounding how the administration will enforce the law's requirement that everyone have insurance, Altman said. If the administration doesn't enforce the requirement, healthy people will likely go uninsured while sick people would keep insurance, likely driving up costs.
Highmark said it worked closely with the insurance department throughout the rate-setting process.
“At a national level, we have long advocated for policies to stabilize the individual market, including insurance parameters that encourage the alignment of premium and risk, distinct funding for individuals with high medical costs and strong incentives to obtain and maintain health insurance coverage,” spokesman Aaron Billger said in an email. “We have continued to urge leaders in Washington to focus on these and other policies that moderate premiums and promote choice and competition in a stable, private insurance market. Our nation needs to drive for immediate action to address the way Americans pay for health care, focusing on longer-term issues of medical care cost drivers and work toward high-quality, value-based care.”
The rate increases don't affect employer-provided health insurance, which the vast majority of people have.
About 363,000 Pennsylvanians have the marketplace plans, according to the latest data from the Centers for Medicare and Medicaid Services. About 57 percent receive the cost-sharing reductions, which are available to people who make up to 250 percent of the federal poverty level — about $30,000 for an individual or $70,000 for a family of four. About 80 percent receive the premium subsidies, which are available for people who make up to 400 percent of the federal poverty level — about $48,000 for an individual or $98,000 for a family of four.
People who make more than 400 percent of the federal poverty level and buy individual plans face the full brunt of the premium increases. About 85,000 Pennsylvanians are in that situation, Altman said. The insurance department has worked with insurers to provide specialized plans for those people that won't cost as much, she said.
The marketplace plans come in four categories, each with different benefit levels. Bronze plans have the lowest monthly premiums and highest deductibles, while platinum plans have the highest premiums and lowest deductibles. In between are silver and gold plans. The cost-sharing reductions are only available for the silver plans, which serve as benchmark plans for setting subsidies and benefits and will face the biggest premium increases.
The increase in silver plan premiums will mean people might qualify for bigger subsidies for the other medal levels.
The subsidies vary by region. Altman encouraged people with the plans to log on to healthcare.gov and shop around to see what their options will be next year.
Pennsylvania reached its lowest uninsured rate on record last year, when the number dipped to 5.6 percent, according to Gov. Tom Wolf's office. Wolf's Medicaid expansion contributed to the low number, covering about 700,000 people in the state.
While the increase for UPMC Health plan appears to be high, it mainly applies to the “silver” health plans on the market, said Adam Pittler, director of product development at UPMC Health Plan.
If the cost of a silver plan rises, tax credits that help qualified customers purchase insurance will complimentarily increase, he said.
“There's still a selection of affordable options,” Pittler said.
Caleb Wallace, senior director of health policy at UPMC Health Plan, urged consumers to shop around for the right plan and call their carriers for assistance.
“This is very much a member-by-member impact kind of thing,” he said.
Ben Schmitt and Wes Venteicher are Tribune-Review staff writers. Reach Schmitt at 412-320-7991, email@example.com or via Twitter at @Bencschmitt. Reach Venteicher at 412-380-5676, firstname.lastname@example.org or via Twitter @wesventeicher.