Maryland: Preliminary avg. 2024 #ACA rate changes: +5.7%

via the Maryland Insurance Dept:

Health Carriers Propose Affordable Care Act (ACA) Premium Rates for 2024

• Public Invited to Submit Comments

BALTIMORE – The Maryland Insurance Administration has received the rate filings containing the proposed 2024 premium rates for Affordable Care Act (ACA) products offered by health and dental carriers in the Individual, Non-Medigap and Small Group markets, which impact approximately 471,000 Marylanders.

The carriers’ requested increases are reviewed by the Insurance Administration and rates must be approved by the Maryland Insurance Commissioner before they can be used. Before approval, all filings undergo a comprehensive review of the carriers’ analyses and assumptions. By law, the Commissioner must disapprove or modify any proposed premium rates that appear to be excessive or inadequate in relationship to the benefits offered, or are unfairly discriminatory. The Insurance Administration will hold a public hearing on the proposed ACA rates in July and expects to issue decisions in September 2023.

In the Individual, Non-Medigap (INM) market, carriers have requested an overall average rate change of +5.7%, with average request by carrier ranging from -2% to +8%. In the Small Group (SG) market, which is utilized by employers with 50 full-time equivalent employees or less, carriers have requested an overall average rate increase of +7.5%, with averages by carrier ranging from +1.4% to +20.4%. In the INM, stand-alone dental market, carriers have requested an overall average rate decrease of -1.3%, with averages by carrier ranging from –3.2% to +4.2%.

The overall average rate increases being requested for 2024 are lower than the requests received last year, driven primarily by 2022 claims coming in lower than anticipated and a reduction in projected claims trend. In both the INM and the SG markets, the average requested increase for 2024 is essentially equal to the average claims trend. The rates submitted by the carriers for the INM market include the estimated impacts from the State’s innovative, state-based Reinsurance Program, which was originally approved for 2019-2023. An extension from 2024-2028 is currently under review by the federal Centers for Medicare & Medicaid Services (CMS) and is expected to be approved this summer. All carriers have assumed the reinsurance program will continue to cover catastrophic claims.

The Reinsurance Program was designed to decrease rates by 30% within three years, with future rate changes tied to increases or decreases in health care claim trends. It was implemented in 2019 and, by January 2021 had resulted in a 32% overall average reduction in the INM rates approved in 2018. Since then, approved INM rate increases have correlated with health care claim trends. Even with the INM increases requested, the 2024 rates would be 21% below the rates being charged in 2018.

In addition to rate change filings, the Insurance Administration also received a filing with new plans from Aetna Health Inc. that will be offered in the INM market in 2024. Aetna is the second carrier to re-enter the INM market since 2021, and will be available statewide. This brings the total number of carriers in the market up to four, and will ensure that Marylanders in all counties will have a choice of at least three carriers.

“We are pleased to have another carrier selling in the Individual Market The state was down to two carriers before the state reinsurance program was implemented” noted Insurance Commissioner Kathleen A. Birrane. “The addition of two new carriers demonstrates the continued success of the program and will provide consumers with an expanded number of choices and will provide additional competitive pressures to keep rate increases low.” Commissioner Birrane will hold a quasi-legislative virtual public hearing on this matter on July 19, 2023 from 10 a.m. to 12 p.m.

“Feedback from all stakeholders is very important and we urge everyone to participate in the public hearing,” Commissioner Birrane said. “Health insurance costs impact everyone and we want to give all Marylanders the opportunity to be heard as we consider the proposed rates.”

For the Individual, Non-Medigap (INM) market, the overall filed average annual rate change across the entire INM market is an increase of 5.7%...

...Note that all illustrative premiums are the full unsubsidized premiums prior to the application of any Advance Premium Tax Credits (APTCs) from the federal government or the state young adult subsidy pilot. Almost 80% of applicants who purchase a plan on www.marylandhealthconnection.gov receive APTCs and will not pay the full premiums shown here.

APTCs vary by a household’s income and are linked to the unsubsidized cost of the second lowest cost silver plan available to a household. Commissioner Birrane made it clear, however, that the existence of these subsidies is not a consideration when reviewing rate filings. “Rates in all markets, including the individual market, must be justified without regard to whether some policyholders may receive assistance in paying the premium derived from those rates.”

For the Small Group (50 or less full-time equivalent employees) market, the overall filed average annual rate change is an increase of +7.5%. In the SG market, a health carrier can request rate changes on a quarterly basis.