Utahns getting health insurance coverage through the federal exchange healthcare.gov could see a substantial spike in their rates next year — and uncertainty on federal funding is mostly to blame, experts say.
Rates are expected to increase by 39 percent in 2018, assistant state insurance commissioner Tanji Northrup said Thursday. In addition to rising health care costs, Northrup said persistent doubt over whether insurers will continue to receive federal subsidies to reduce deductibles and copayments for lower-income Utahns is a major factor driving rates up.
“It’s the million-dollar question and we just don’t know,” Northrup said.
Amid several failed attempts by the Republican-controlled Congress to repeal the Affordable Care Act, also known as Obamacare, it remains unclear whether lawmakers will approve those subsidy dollars.
“Over half of this rate increase is due to the continued political games that lawmakers are playing in Washington, D.C., instead of sitting down to work together to stabilize the marketplace and protect Utah families,” said Jason Stevenson with the Utah Health Policy Project, a nonprofit advocacy group.
The 39 percent rate hike would affect about 6 percent of Utahns who buy health insurance on the state’s individual market — but not those insured through their workplace, Medicare, Medicaid or Tricare. As of April, U.S. Department of Health and Human Services data indicate that nearly 177,000 Utahns fell into this category, whether subsidized or not.
For 2018, Utahns will have individual market options from both of the state’s remaining exchange insurers — University of Utah Health Plans and Intermountain Healthcare SelectHealth.
With the increase, monthly premiums in Salt Lake County on the individual market would be as high as $450 for the average nonsmoking 21-year-old and as low as about $171. The average bump across the assortment of plans available would be about 33.6 percent, with what are known as Silver plans seeing the highest rise, Stevenson said.
Last year, the lowest premium rate in Utah’s most populous county was at $150 and the highest was about $380.
In rural Grand County, by comparison, premiums for the same 21-year-old will range from $247 to about $561, while last year, those same rates were as low as $184 and as high as $483.
A database of all rates for all plans is available at the Utah Department of Insurance website.
The American Academy of Actuaries, a professional organization for insurance-industry risk managers, estimates that the potential subsidy elimination accounts for 20 percentage points of the projected 39 percent rise.
About 109,000 Utahns qualify for those reduced deductibles and co-payments, for what Northrup said was about $100 million at stake in Utah in 2018.
Open enrollment under Obamacare for 2018 begins Nov. 1 and ends Dec. 15. Residents in all 29 counties will have plan options through University of Utah Health Plans and Intermountain Healthcare SelectHealth.
A third company, Molina Healthcare, announced in August that for financial reasons, it would not offer plans on the federal exchange in Utah. The Long Beach, Calif.-based company said its withdrawal from Utah and Wisconsin was part of a restructuring after a $230 million second-quarter loss.
Just last year, there were four insurance carriers on the Utah exchange, prior to Humana announcing its departure.
Molina’s withdrawal has forced nearly 70,000 Utahns to have to seek a new health plan this year, Northrup said.
A spokeswoman for Intermountain Healthcare SelectHealth, Jamee Wright, said the rate increases were essential to cover the costs of services and to allow SelectHealth to continue offer individual health plans. Wright confirmed that uncertainty over the subsidies, known as cost-sharing reduction subsidies, also contributed to its rate hike — along with rising prescription drug costs.
Chad Westover, CEO of the U. Health Plans, said that given the cloudy future of the Affordable Care Act, the company has been forced to calculate rates for scenarios if subsidies are funded and if they are not — with a new round of enrollments just over a month away.
“Once open enrollment begins,” Westover said Thursday, ”we really hope that policymakers understand that people will be making choices based on what is available and works for them. We really do need clarity from Washington before that time so they can make informed decisions.”