District of Columbia: PRELIMINARY 2020 ACA Exchange Premium Rate Changes: 9.0% increase

Along with Massachusetts and Vermont, the District of Columbia merges their Individual and Small Group markets for purposes of risk pools and risk adjustment. This does not, however, necessarily mean that their Indy and Sm. Group average premium changes are identical. For one thing, there are more carriers which offer small group plans than individual market plans; for another, the market share ratios between the two differ.

A week ago, the DC Dept. of Insurance, Securities and Banking (DISB) issued preliminary 2020 rate filings along with this press release:

Washington, DC – The District of Columbia Department of Insurance, Securities and Banking (DISB) received 181 proposed health insurance plan rates for review from Aetna, CareFirst BlueCross BlueShield, Kaiser Permanente and United Healthcare in advance of open enrollment for plan year 2020 on DC Health Link, the District of Columbia’s health insurance marketplace.

Today at 5:30 pm, the Department will conduct a public hearing at One Judiciary Square, Old Council Chambers, 441 4th St. NW. The purpose of the hearing is to review the 2020 individual and small group health insurance rates proposed by carriers offering health benefit plans sold on DC Health Link. During the hearing, DISB Commissioner Stephen C. Taylor will provide the insurers the opportunity to present their proposed rates, as well as allow the public to provide comment. To be added to the witness list, visit disb.dc.gov. Written statements can be sent to the Department prior to the closing of the hearing record by 5 pm on Monday, June 24, 2019.

“The Bowser Administration remains committed to undertaking a thorough analysis of the filed rates to determine whether they meet the District’s standard of not being excessive, inadequate, or unfairly discriminatory” said Commissioner Stephen C. Taylor. “The rate review process will culminate at a public hearing in August where the Department will hear from our actuaries and the public prior to approving the 2020 rates.”

The four insurance companies filed proposed rates for individuals, families and small businesses for the 2020 plan year. Overall, 181 plans were filed, compared to 180 last year. The number of small group plans increased from 155 to 156, and the number of individual plans remained at 25.

Overall individual rates increased an average of 9.0 percent and small group rates increased an average of 10.5 percent. In the individual market, CareFirst proposed an average increase of 7.7 percent for HMO plans, and 15.6 percent for PPO plans. Kaiser proposed an average increase of 5.0 percent. For small group plans, CareFirst filed average rate increases of 13.5 percent for HMO plans and 18.5 percent for the PPO plans. Kaiser small group rates proposed an average increase of 3.0 percent. Aetna filed for an average increase of 16.1 percent for HMO plans and 5.0 percent for PPO plans. Finally, United proposed an average increase of 13.0 percent and 7.4 percent for its two HMOs and 11.2 percent for its PPO plans.

For plan year 2020, the Department required all health insurance carriers to provide two sets of rates. Information on the proposed individual and small group rates is available here. One set of rates assumes the merger of individual and small group experiences in calculating risk adjustment. The other set of rates does not. Both set of rates will be discussed at the hearing.

Oddly, when I plug in the hard numbers directly off of the actual filings, while the requested rate change percentages are the same as above, the weighted averages are somewhat different in both categories:

  • For the individual market, I get an 11.2% increase vs. DISB's 9.0%
  • For the small group market, I get 13.9% vs. DISB's 10.5%.

I have no idea what accounts for this discrepancy...the "total enrollees impacted" figures are clearly stated below. I've listed the official changes as well in the name of clarity.