Exactly one month ago, I posted an analysis of the preliminary 2021 premium rate filings for Georgia's individual and small group market carriers. At the time, the requests from the individual market carriers ranged from a 22.8% reduction to as much as an 18.3% increase.
I've also repeatedly noted that estimates by the carriers of the impact of the COVID-19 pandemic is pretty much all over the place. While a few carriers have indeed baked in significant rate hikes in response to COVID, most either don't mention it at all in their preliminary filings or, if they do, state that they expect the net impact to be negligible. However, they also make sure to hedge their bets by reserving the right to re-file their 2021 requests with adjusted COVID impact.
I've acquired the preliminary 2021 rate filings for Georgia's individual and small group market carriers. There were two filings submitted for many of the carriers because of a (since delayed) ACA Section 1332 waivier submission; the carriers submitted one in case the waiver was approved and a second if it wasn't. Since the process has been delayed, however, the no-waiver filing is the one which is relevant.
As you can see in the tables at the bottom of this entry, the overall weighted rate change requested by individual market carriers in Georgia is a 1.3% reduction, which would have been more like a 2.3% drop if not for the COVID-19 factor, according to the carriers. The small group market carriers are requesting an 11.1% average increase, which is unusually high these days. I haven't reviewed all the memos for the sm. group market to see what they're pinning on COVID-19, however.
Here's what the indy market carriers have to say about the COVID-19 factor in their 2021 filings:
Gov. Brian Kemp on Wednesday extended Georgia’s coronavirus restrictions while explicitly banning cities and counties from adopting rules requiring masks or other face coverings, a measure that could bolster the state’s case in a possible legal battle.
Kemp’s executive order — which was set to expire Wednesday evening — still encourages, rather than requires, Georgians to wear masks in public. The governor has called such a requirement “a bridge too far,” and his office has said local mandates are unenforceable.
The governor’s coronavirus orders have for months banned local governments from taking more restrictive or lenient steps than the state. But the new set of rules he signed on Wednesday specified for the first time that cities and counties can’t require the use of masks or other face coverings.
For the record, here's how Georgia is doing when it comes to handling COVID-19 at the moment:
Louisiana's 2020 Presidential primary was scheduled for April 4th, but the other day Democratic Governor John Bel Edwards and Republican Secretary of State Kyle Ardoin agreed to reschedule it for June 20th...which is actually later than the last previously-scheduled primary in the U.S. Virgin Islands on June 6th:
The presidential primary elections in Louisiana slated for April will be delayed by two months, the latest in a series of dramatic steps government leaders have taken to slow the spread of the new coronavirus.
Secretary of State Kyle Ardoin, Republican, and Gov. John Bel Edwards, a Democrat, both said Friday they would use a provision of state law that allows them to move any election in an emergency situation to delay the primary.
The presidential primary elections, initially scheduled for April 4th, will now be held June 20th. Ardoin said in a press conference he does not know of any other states that have moved elections because of the new coronavirus, or COVID-19.
Back in November, Georgia Governor Brian Kemp released a proposed ACA Section 1332 Waiver proposal which, if it were to be fully approved, would completely transform the ACA individual marketplace into something entirely different:
On November 4, 2019, Governor Brian Kemp of Georgia released a new draft waiver application under Section 1332 of the Affordable Care Act (ACA) that, if approved, would reshape the state’s insurance market. The application reflects a two-phase approach: a state-based reinsurance program to begin in plan year 2021, followed by a transition to the “Georgia Access” model beginning in plan year 2022. Both components of the waiver application would extend through plan year 2025.
After several years with four carriers participating in their ACA individual market, the Peach State is gaining not one but two additional carriers this year: CareSource and Oscar are joining Alliant, Ambetter/Centene, Blue Cross Blue Shield and Kaiser.
Today, however, CMS has posted the final/approved rate changes, and three of the four carriers already on the Georgia market (Alliant, Ambetter/Centene and Kaiser) are looking at slightly lower rates than they had requested. The fourth, Blue Cross Blue Shield, is bumping up their rates by an additional percentage point. Overall, Georgia carriers are dropping unsubsidized premiums by 0.9%.
A few weeks ago, I posted a lengthy, in-the-weeds explainer about how the ACA's Medical Loss Ratio (MLR) provision works. The short version is that ever since the ACA went into effect in 2011 (3 years before newly-sold policies had to be ACA compliant), to help reduce price gouging, insurance carriers have been required to spend a minimum of 80% of their premium revenue (85% for the large group market) on actual medical claims.
Put another way, their gross margins are limited to no more than 20% (or 15% in the large group market). Remember, that's their gross margin, not net; all operational expenses must come out of that 20% (15%). The idea is that they should be spending as much of your premium dollars as possible on actual healthcare, as opposed to junkets to Tahiti or marble staircases in the corporate offices, etc. Anything over that 20% (15%) gross margin has to be rebated to the policyholder.
After several years with four carriers participating in their ACA individual market, the Peach State is gaining not one but two additional carriers this year: CareSource and Oscar are joining Alliant, Ambetter/Centene, Blue Cross Blue Shield and Kaiser. Unlike a lot of the states I've crunched numbers for recently, I was able to acquire hard enrollment numbers for every single Georgia carrier...including both the Individual and Small Group markets, which is a rarity this year!
Statewide, GA's individual market carriers are requesting average unsubsidized 2020 rate hikes of just 2.4%, while the small group carriers are looking for a 12.8% average increase:
Long-time readers of this site may remember that I have a "special place" in my heart (more like in the pit of my stomach) for Ralph Hudgens, the now-former Georgia state Insurance Commissioner, ever since I read about this ugly incident way back in 2013:
“Let me tell you what we’re doing (about ObamaCare),” Georgia Insurance Commissioner Ralph Hudgens bragged to a crowd of fellow Republicans in Floyd County earlier this month: “Everything in our power to be an obstructionist.”
After pausing to let applause roll over him, a grinning Hudgens went on to give an example of that obstructionist behavior, this one involving so-called “navigators” who are being hired to guide customers through the process of buying health insurance on marketplaces, or exchanges, set up under the federal program.