Pennsylvania approves sharp increases for Obamacare plans
The Pennsylvania Insurance Department on Monday approved monthly premium increases of up to 55 percent for health insurance plans sold on the Affordable Care Act's online marketplace in the state.
Calling the increases “significantly higher than (she) would have liked,” Insurance Commissioner Teresa Miller said in a conference call with reporters that the rate hikes were needed to keep insurers from abandoning the market completely.
“We were trying to make a one-time correction … we hopefully got these products to a place now where they are more accurately priced,” Miller said.
Increases averaged 32.5 percent for individual plans and 7.1 percent for small group plans, according to a department news release. The annual open enrollment period during which people can buy and switch plans on the marketplace runs from Nov. 1 through Jan. 31. Most people who buy the plans are eligible for federal subsidies that lower their monthly premiums based on income and other factors, limiting the increases they actually face.
The Insurance Department approved increases of 32 percent to 55 percent — some of the largest — for plans sold by Highmark Inc. The Pittsburgh-based insurer set some of the lowest monthly premiums in the country when the ACA market launched in 2014 and has lost more than $800 million in the market since then.
The insurer says new members were sicker than expected. Miller said Monday that insurers in Pennsylvania have “struggled to accurately price their plans, and because of this plans have been underpriced in Pennsylvania.”
Many of the approved rates were higher than what the insurers requested in regulatory filings in May. Highmark's original requests ranged from 25 percent to 48 percent for its approximately 117,000 ACA members in the state. UPMC Health Plan, for which the department approved final increases of 9 percent to 27 percent, originally requested increases of 1 percent to 16 percent for its 110,000 members.
Miller said the final rates followed a back-and-forth in which insurers threatened to abandon the market, which could have left some counties with no insurers selling the plans.
Aetna abandoned the market in Pennsylvania and most other states earlier this year, saying losses resulting from high claims from new members made their participation in the markets unsustainable. UnitedHealthcare abandoned the market in all states including Pennsylvania.
Highmark has sued the federal government in the Court of Federal Claims over a risk program meant to protect insurers from runaway losses, saying the government owes the insurer $223 million for 2014 and more for subsequent years. Miller said Monday that her department has requested the Court's permission to file an amicus brief supporting Highmark in the lawsuit.
The Affordable Care Act required insurers to sell insurance to everyone no matter how sick, ending a longstanding practice of denying coverage or charging higher rates for the sickest. “Despite the progress we have made in getting more Pennsylvanians insured, we could not expect the Affordable Care Act to fix everything at once,” Antoinette Krauss, executive director of the consumer group Pennsylvania Health Access Network, said in a prepared comment Monday. The group has urged the department to limit increases.
“The rates announced by the Insurance Department today ... are the result of years of insurance companies denying coverage and care to people who need treatment,” Krauss said.
Alexis Miller, senior vice president of individual and small group business for Highmark Inc., said the approved rates are sufficient for Highmark to break even on its ACA plans in 2017 if members keep using about the same amount of health care.
“It's what we needed to do for 2017, but for long-term sustainability things have to change with the actual ACA law and regulations,” Miller said.
The law allows insurers to charge older people more per month for insurance but restricts how much more they can charge. People who are 64 can only be charged up to three times what the youngest members pay each month. Miller, of Highmark, said the oldest members' medical bills are closer to seven times what the youngest members pay, and the insurer supports changes to allow for a larger difference between premiums for the oldest and youngest.
The insurer also supports changes to prevent people from buying insurance, paying premiums for a few months while they get treatment and then abandoning the plans. UPMC Health Plan supports more verification of eligibility for people seeking coverage outside the annual open enrollment periods, according to UPMC spokesman Paul Wood.
Both Highmark and UPMC say they are focused on keeping medical bills down by improving how they manage and coordinate care for new members, avoiding hospitalizations and other costly episodes.
Highmark has reduced by 4.5 percent what it pays doctors to treat ACA patients.
People with individual and small-group plans — for businesses with fewer than 50 employees — make up about 10 percent of insured Pennsylvanians, according to the Insurance Department's release. In addition to its changes to those markets, the federal health law, often called Obamacare, enabled states to expand Medicaid to people who make up to 138 percent of the federal poverty level, or about $16,400 per year for a single person in 2016. A single person who makes more than that but less than about $47,500 per year is eligible for marketplace subsidies. People who make more than that may still buy marketplace plans but don't receive subsidies. In 2016, about 75 percent of Pennsylvanians who bought marketplace plans qualified for the subsidies, according to the release.
The uninsured rate in Pennsylvania has dropped to 6.4 percent, lower than the national average of 9.1 percent, according to the release.
Wes Venteicher is a Tribune-Review staff writer. Reach him at (412) 380-5676 or firstname.lastname@example.org