2018 Rate Hikes: Pennsylvania (early look)

Ins. Commissioner: Up to 75% of increase may be SPECIFICALLY on sabotage

Pennsylvania is way too easy for me this year; I don't even have to plug numbers into a spreadsheet to figure out the statewide average rate hikes.

Why? Because the state insurance commissioner has already done the math for me...and then some:

Insurance Commissioner Announces Single-Digit Aggregate 2018 Individual and Small Group Market Rate Requests, Confirming Move Toward Stability Unless Congress or the Trump Administration Act to Disrupt Individual Market

Harrisburg, PA - Insurance Commissioner Teresa Miller today announced that the five health insurers that sell on Pennsylvania’s individual market will stay in the market and filed plans for 2018 with aggregate statewide rate increases of 8.8 percent for individual plans and 6.6 for small group plans. However, Miller warned that these increases will be much worse if the federal government takes actions that would change the Affordable Care Act or its enforcement.

“These low percentages show that Pennsylvania’s market is stabilizing and insurers are better understanding the markets and the population they serve,” said Commissioner Miller. “I sincerely hope that Congress and the Trump Administration do not take action that could negatively impact the progress we have made in Pennsylvania.”

Commissioner Miller warned of the significant impact that action from the federal government to change the Affordable Care Act would have on insurers’ aggregate proposed rate increases. If the individual mandate is repealed, insurers estimate that they would seek a 23.3 percent rate increase statewide. If cost-sharing reductions are not paid to insurers, the companies would request a 20.3 percent rate increase statewide. If both changes occurred, insurers estimate they would seek an increase of 36.3 percent.

What's fascinating to me is how quickly these press releases are evolving now that the rubber is hitting the road. A couple months ago it was a lot of vague warnings and actuarial-speak about "negative impact on morbidity" and so on. Then, starting a few weeks ago, insurance company representatives started getting more specific, with the CareFirst (MD, DC, VA) CEO mentioning "tacking on an extra 15 points" due to Trump/GOP uncertainty (or around 40% of the total rate increase request).

Finally, over the past week or so, the carriers stopped messing around entirely, with the CEO of Blue Cross Blue Shield of North Carolina going so far as to give an exact percentage point breakout (60% of the total) and even whipping up a nifty graphic showing specifically what's causing their 22.9% increase request (14.1% Trump/GOP uncertainty, 8.8% other factors). Since BCBSNC holds the vast majority of NC's individual market, that effectively means that their breakout is representive statewide.

And finally, you have this press release from the Pennsylvania Insurance Commissioner, which applies to all 5 carriers collectively: 8.8% increase if not for Trump/GOP sabotage, up to 36.3% with it added. That means that the worst-case scenario would mean a "Trump Tax" of 27.5%...or 3/4 of the overall rate increases.

“Information provided by insurers shows the extent to which instability and changes would impact Pennsylvania’s 2018 health insurance rates. This proves what we already know – instability caused by adverse action from the federal government will do nothing but hurt consumers who are stuck in the middle,” said Commissioner Miller. “The 506,000 Pennsylvanians with Affordable Care Act-compliant plans in the individual market deserve single-digit rate increases like the ones most people will see if Congress and the Trump Administration choose not to risk consumers’ health and financial well-being by jeopardizing the stability of these markets.”

This is also a handy tidbit. I have PA's total indy market pegged at 613,000 people, with 539,000 being ACA-compliant; apparently it's a bit lower than that.

Commissioner Miller also noted that many consumers who receive subsidies to help pay their premiums likely will not feel these rate increases. Under the ACA, premium tax credits are assessed based on local plan costs and adjust as costs change to off-set the burden of cost changes on consumers. In 2016, 76 percent of Pennsylvanians who purchased health insurance from Healthcare.gov qualified for premium assistance.

In April, Commissioner Miller and the chief executives of Pennsylvania’s five individual market health insurers issued a letter to Secretary of Health and Human Services Tom Price stressing the need for stability in the individual market. The letter, which stresses that instability could reduce coverage options and increase prices for the individual market population in Pennsylvania and around the country, can be read here.

Rate filings for 2018 health insurance plans were submitted to the Insurance Department on May 22. All five health insurers filed to continue selling in 2018, and each of Pennsylvania’s 67 counties will have on-exchange coverage options for 2018 based on current filings. Rate change requests vary by plan and region, and complete rate filing requests including plan-specific information, will be available on July 21 at www.insurance.pa.gov.

Looks like I'll have to wait until 7/21 to get the official breakout.