ACA to see smaller rate hikes, reductions in 2019

After years of substantial rate increases – including sometimes overreacting – health insurers in many states are seeking smaller hikes and even some reductions for 2019, according to an article in The Wall Street Journal.

The publication reviewed the insurers’ preliminary rate requests published on Wednesday by the U.S. Department of Health and Human Services. Insurers are seeking single-digit increases in places like Mississippi and Florida, and reductions in other states like Texas, Illinois, Arizona, North Carolina and Wyoming.

Related: Suddenly, everyone wants a piece of the ACA market

Indeed, Blue Cross Blue Shield of Wyoming, the only insurer to place plans on the ACA exchange in that state, is seeking a 0.27 percent average decrease for 2019, after a 48 percent spike in its premiums this year.

“The generally more-limited proposed rate increases reflect the improved financial situation of many insurers’ ACA business,” the WSJ writes. “Years of ratcheting up rates have brought their premiums more in line with costs — and sometimes have overshot, resulting in the proposed decreases for next year.”

Still, insurers in some markets are seeking significant rate increases, including CareFirst BlueCross BlueShield in Maryland. The insurer is looking to charge 18.5 percent more on average for health maintenance organization plans and 91.4 percent more for its smaller preferred provider organization business – because its enrollees have such high health costs.

Some insurers are building in additional rate increases to cover anticipated higher costs from less people buying ACA plans now that the individual mandate has been rescinded.

While the health insurance market appears to be stabilizing, premiums will “continue to represent a hefty bill for many consumers,” the WSJ writes.

For example, if the proposed rates within the Denver market are finalized, a 40-year-old nonsmoker who doesn’t get a subsidy would pay $439 a month next year for a benchmark plan, which is the second-cheapest in the silver tier of coverage, according to the Kaiser Family Foundation. That is 6 percent higher than this year’s benchmark plan, which cost $413 a month.

Nationally, the average premium for benchmark ACA plans, priced for a 40-year-old, went up by about 34 percent in 2018, and 20 percent in 2017, according to the Kaiser Family Foundation.

Market stabilization is also enabling some insurers to enter new ACA markets or expand their footprints for 2019, a reversal after years of pullbacks, according to the WSJ. One such insurer is the nonprofit Medica, which will expand the number of states where it offers ACA plans from six to eight because that business is finally going to be in the black, Medica vice president Geoff Bartsh tells the WSJ.

“In many areas, premiums have caught up to medical expenses,” Bartsh says.