A nonprofit publication of the Kentucky Center for Public Service Journalism

Deadlines for individual insurers extended to Sept. 5 amidst uncertainty over cost-sharing subsidies

By Melissa Patrick
Kentucky Health News

Insurers in the Obamacare marketplace for individual coverage have been given three more weeks to finalize their 2018 rates, pushing the deadline to Sept. 5. The most recent filing deadline was Aug. 16.

This is in response to the uncertainty around whether the Trump administration will continue to fund the cost-reduction payments that help low- and moderate-income people afford the tax-subsidized health insurance. These reimbursements to insurers are around $7 billion a year.

The Aug. 10 Centers for Medicare and Medicaid Services memo says the extension will allow the agency to make risk-adjustment formula changes to account for this potential “uncompensated liability.”

“Many state departments of insurance have permitted issuers to increase rates for their silver-metal-level plans for the 2018 benefit year in order to account for uncompensated liability that issuers may face for cost-sharing reductions provided to eligible insured individuals,” CMS said, adding that it will propose a new risk-adjustment methodology “in which all marketplace issuers increase silver metal plan rates to account for cost-sharing reduction payments.”

The cost-sharing payments have been challenged in court but are being paid to insurers on a monthly basis, with no commitment from the Trump administration to continue them. President Trump has threatened to stop making the payments, calling them a “bailout” for insurance companies. The next payments are due Aug. 21.

Insurers have said they will have to raise their premiums by as much as another 20 percent to make up for the lost reimbursements or in some cases pull out of the Obamacare marketplaces altogether. Kaiser Family Foundation estimates that in Medicaid-expansion states such as Kentucky, rates for a typical plan would have to rise an additional 15 percent to make up for the lost reimbursement.

Politico reports that the non-partisan Congressional Budget Office will soon release a report breaking down the effects of cutting Obamacare’s cost-sharing reduction payments.

About 36,000 of the 82,000 Kentuckians with individual Obamacare policies qualified for these subsidies in 2017. Most Kentuckians who gained health insurance through Obamacare did so through the expansion of Medicaid to those who earn up to 138 percent of the federal poverty line.

Anthem Health Plans of Kentucky, the only insurer offering individual marketplace plans in every Kentucky county in 2018, has made an initial request for a 34.1 percent rate increase in the state, one of the largest in the nation.

CareSource, which will offer plans in 61 counties, withdrew its initial request for a rate increase of 20.8 percent on Aug. 3, but recently refiled it again at the same rate. These rate requests can fluctuate through the new deadline of Sept. 5.

The final deadline for insurers to sign their contracts to participate in the Obamacare marketplace is Sept. 27, and open enrollment begins Nov. 1.

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