Health insurer Anthem appeared Tuesday before a state panel to justify its intention to raise premiums for Obamacare plans by 21 percent in 2018.
Anthem proposed the average monthly premium hike in June. While some customers would see their rates dip slightly, others would get hit with a price increase of up to 35 percent, according to Anthem’s filing. About 28,000 Anthem customers would be affected.
The other two insurers selling Obamacare plans in Maine also seek double-digit rate increases for plans they sell next year. Harvard Pilgrim is pursuing the largest rate hike, at 39.7 percent on average, affecting 21,000 customers in Maine. Community Health Options aims to raise rates by an average 19.6 percent for about 33,000 customers.
The insurers serve the “individual market” in Maine, or those who buy health insurance themselves instead of getting it through work or government programs such as Medicare or Medicaid.
All three explained their reasons for the rate hikes in filings last month with the Maine Bureau of Insurance. The insurers expect the population they cover to shrink and grow sicker and older overall because the Trump administration has signaled that it won’t enforce Obamacare penalties for failing to buy insurance. Younger, healthier customers will drop coverage as a result, leaving largely individuals with serious health problems who need costly medical care, the insurers predict.
There are indications that this trend is already happening. The insurers note in their filings that healthy people are beginning to skip insurance even now, leaving those that did buy coverage in 2017 significantly sicker, as a whole.
Anthem has also noted the uncertainty surrounding Obamacare subsidies that help their customers to afford deductibles, co-payments, and other out-of-pocket costs. Those subsidies have largely shielded consumers from rate increases, but their future is in doubt amid Republican efforts to repeal the Affordable Care Act.
Without the subsidies, Anthem might need to raise rates further, stop selling certain plans or even stop selling Obamacare plans in some areas altogether, the company said in its filing.
According to a new analysis by the Kaiser Family Foundation, the average premium for a benchmark silver plan in Obamacare marketplaces would need to increase by an estimated 19 percent for insurers to make up the loss of the cost-sharing subsidies.
Anthem’s hearing came just as Senate Republicans’ plan to repeal the 2010 law without immediately replacing it appeared doomed Wednesday, with U.S. Sen. Susan Collins and two other moderate senators vowing to block it.
Community Health Options is scheduled to appear before the panel on Monday, followed by Harvard Pilgrim next Tuesday. Maine Insurance Superintendent Eric Cioppa is expected to issue a decision on the rate requests by mid-August.