Maryland Moving Forward to Reduce Obamacare Hikes

Maryland may be able to wipe out proposed Obamacare premium increases for 2019.

The Department of Health and Human Services notified the state-run Maryland Health Benefit Exchange July 5 that its application to create a reinsurance program for 2019 through 2023 is complete, the first step to moving ahead toward the necessary federal approval.

Proposed premium increases for Maryland’s 212,000-member individual market for 2019 average 30.2 percent, but under the state’s estimates, the proposed reinsurance program “could more than wipe out the increase,” exchange chief of staff Andy Ratner told me.

Under the Maryland proposal, the state would use about $365 million in taxes levied on health plans plus about $100 million in federal savings for premium tax credit subsidies to pay 80 percent of claims between $20,000 and $250,000.

“There was a lot of concern about the impact of increases in premiums, especially for people who are outside of the financial aid eligibility window,” Ratner said.

Under the ACA, people with household incomes between 100 percent and 400 percent of the federal poverty level are eligible for premium tax credit subsidies.

But double-digit premium increases for 2016 and 2017, and expected 15 percent average increases across the country in 2019, are pushing many who don’t receive the subsidies, or who don’t receive enough subsidies, out of the individual market altogether.

The Department of Health and Human Services July 2 released three reports finding that “state markets are increasingly failing to cover people who do not qualify for federal subsidies even as the Exchanges remain relatively stable.”

Alaska, Minnesota, and Oregon have set up reinsurance programs to reduce high premium increases by covering high-cost claims, and other states are applying for approval under Section 1332 of the Affordable Care Act. The section allows states to make changes to the law as long as they provide coverage that is as comprehensive and affordable to a comparable number of residents and don’t increase the federal deficit.

Maryland hopes to receive a final determination by the HHS by late August. ACA open enrollment for 2019 is scheduled for Nov. 1 through Dec. 15.

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