WASHINGTON – Shortly after the Maryland Insurance Administration approved additional rate increases for 2018 individual health plans of up to 76 percent, U.S. Senator Ben Cardin (D-Md.), a member of the Senate Finance Health Care Subcommittee, responded with the following statement on the reasons behind the dramatic changes. The spikes come just days before open season begins for new plans.
“Marylanders now know who to blame for their high increases in health insurance premiums in the individual marketplace. Clearly, President Trump’s decision not to fund the cost sharing has caused a large increase in premiums for Maryland consumers who purchase Silver plans on the exchange. These payments are not a bailout for insurers, but are subsidies to help lower the out-of-pocket expenses for low-income Marylanders. President Trump promised to lower health care costs, but every action he has taken while in office has raised the price of health coverage exponentially for millions of Americans.”
After months of injecting uncertainty into the markets with threats to end cost-sharing reduction (CSR) payments, President Trump finally announced this month that he would indefinitely halt the CSR payments. Insurers in Maryland responded by refiling their 2018 Silver plan premium rates to account for the unpaid CSR reimbursements. The Maryland Insurance Administration approved a rate increase of 58.2 percent for CareFirst HMO Silver plans and a rate increase of 76 percent for CareFirst PPO Silver plans. Kaiser Permanente was granted a 43.4 percent increase for its HMO Silver plans. CSR payments offset $100 million of costs for plan year 2018, which will now be passed on to consumers.
These secondary hikes affect Silver plans on the individual market only. There are no premium hikes for other metal level plans sold on the individual market. The initial rate hikes from 2017 to 2018, based on the President’s threats to cut the CSR payments, included a 26.8% increase in approved rates for CareFirst HMO Silver plans, a 23.9% increase in approved rates for CareFirst PPO Silver plans and a 20.7% increase in approved rates for Kaiser HMO Silver plans. The decision to actually cut off the CSR payments more than tripled the necessary rate increases.