September 10, 2017
Topeka Two health insurance companies that offer Obamacare policies in Kansas said last week that Washington politics are largely to blame for the rate hikes they are seeking next year, but Lt. Gov. Jeff Colyer, a vocal critic of the program, said he still believes Obamacare itself is to blame.
Officials from Blue Cross Blue Shield of Kansas and Medica Insurance Co., based in Minnetonka, Minn., spoke last week after the Kansas Insurance Department announced the range of rate changes being proposed for next year.
Both companies said they plan to charge higher premiums next year, although most consumers will not feel the effects of those if they qualify for tax credit subsidies. And both said a big reason for the rate hikes is uncertainty over the future of the program and whether Congress and the Trump administration will fully fund it.
“One of the big issues is whether the cost-sharing will be funded,” said Medica spokesman Larry Bussey. “There are also issues about how aggressively the individual mandate will be enforced. If that’s not enforced, obviously that would tend to have healthy people stay out of the market.”
Under Obamacare, people with incomes below 250 percent of the federal poverty level, or $37,650 for an individual, can qualify for additional subsidies to offset their copays and deductibles if they buy a certain kind of mid-level, or “silver” health plan.
In those plans, insurers are expected to pay health care providers in full and then get reimbursed by the federal government for the copay and deductible that would otherwise be the patient’s responsibility.
In July, however, President Donald Trump threatened to cut off those cost-sharing payments, saying in a tweet that they were “bailouts for insurance companies.”
“Which of course, it’s not a bail-out,” said Blue Cross Blue Shield spokeswoman Mary Beth Chambers. “It was an agreement with the government that we would pay the providers up front and then we would get reimbursed. Month to month, there is still concern as to whether the government is going to continue reimbursing insurance companies for the cost-sharing reductions that they have paid.”
In fact, this year, Kansas Insurance Commissioner Ken Selzer specifically allowed companies to build into their rate plans increased costs that could result if Washington does not fund the cost-sharing program, Chambers said.
“We were allowed to, for that specific silver plan, kind of load in a rate that would cover the cost of cost-sharing reductions if we were not to get those payments from the government," she said.
The administration has also shortened this year’s open enrollment period to a six-week period, from Nov. 1 through Dec. 15. It has also reduced funding in the Department of Health and Human Services for advertising open enrollment and paying for the health care “navigators” who help consumers shop for plans on the exchange market.
During 2017, nearly 98,780 Kansans bought health insurance through the Obamacare exchange, according to HHS. The vast majority of those, or roughly 84 percent, received subsidies in the form of advance tax credits to pay their premiums, and more than half, 55 percent, qualified for cost-sharing assistance.
The vast majority of those plans were sold by Blue Cross Blue Shield of Kansas, which did not submit proposed rate changes this year because it plans to offer policies through a different corporate entity next year — an “exclusive provider organization” instead of its HMO — which technically makes Blue Cross a new carrier on the exchange market, Chambers said.
Chambers said the main reason it chose to make that change was the fact that Kansas lawmakers this year approved Gov. Sam Brownback’s proposal for a big increase in the privilege fee it levies on HMO policies in order to pay for restoring a 4-percent cut in Medicaid reimbursement rates ordered the previous year.
However, Chambers said, the premiums under the new Blue Cross plans will be higher than under the 2017 plans. She also said the benefits and the provider networks will be the same under the new plans.
Medica, which sold only about 6,000 policies in Kansas this year, submitted rate increases for two plans. Under one, rates would increase an average of 16.62 percent, and another averaging 29.79 percent.
Blue Cross sells plans only in the 103 counties outside of Johnson and Wyandotte counties. Medica sells policies in all 105 counties in Kansas.
The exact increase that an individual would experience depends on many factors, company officials said, including the person’s age, location, tobacco use and the size of their family, if they purchase family coverage.
In its rate filing, Medica cited a number of factors such as medical inflation, a sicker population than it initially predicted and “(an) unprecedented amount of uncertainty and risk inherent in the marketplace.”
The Insurance Department announced those proposed rates, which are still subject to public comment and approval, on Aug. 31. The next day, Lt. Gov. Colyer issued a statement that mentioned only the 29 percent rate hike, and blaming it all on flaws in Obamacare itself.
“The 29 (percent) increases for health insurance are another rung on the ObamaCare ladder of failure, just months after this broken system forced a major insurer to leave the Kansas City market,” Colyer said, referring to Blue Cross Blue Shield of Kansas City’s decision to drop out of the exchange market in 2018.
“This cost increase will force Kansans to cut their family budgets to obtain needed healthcare services,” Colyer continued. “I urge Congress to keep their promise to repeal ObamaCare and allow us to work with our stakeholders to create Kansas solutions for Kansas families."
In fact, most people who receive subsidies to buy their insurance will not see higher costs for themselves because the amount they pay is determined by their income, and the subsidies increase as the cost of policies increase.
The Journal-World attempted to contact Colyer to clarify his statement and to respond to the company officials who said the rate increases were largely due to uncertainty in Washington over the future of the program.
Through his spokesperson, Colyer issued another statement reiterating his first.
“The ObamaCare debacle has caused market instability in Kansas and all across the nation, to the detriment of low-income households who are forced to make tough decisions with their family budgets,” he said. “The true path forward is for Congress to repeal and replace ObamaCare so we can create Kansas solutions for Kansas families.”
Originally published at: http://www2.ljworld.com/news/2017/sep/10/insurers-blame-washington-politics-health-care-rat/