OHIC announces new 2018 rates in response to Trump’s CSR cut

THE OFFICE OF THE HEALTH Insurance Commissioner and HealthSource RI announced that new rates for silver-level plans in the individual health insurance market place will increase 18-20 percent due to the elimination of Cost Sharing Reduction payments to insurers from the federal government. However, these increases will largely be offset by federal tax credits as mandated by law. / BLOOMBERG FILE PHOTO/ANDREW HARRER
THE OFFICE OF THE HEALTH Insurance Commissioner and HealthSource RI announced that new rates for silver-level plans in the individual health insurance marketplace will increase 18-20 percent due to the elimination of Cost Sharing Reduction payments to insurers from the federal government. However, these increases will largely be offset by federal tax credits as mandated by law. / BLOOMBERG FILE PHOTO/ANDREW HARRER

PROVIDENCE – The R.I. Office of the Health Insurance Commissioner has approved new rates increases for HealthSource RI’s silver-level health plans sold on the individual market, OHIC announced Wednesday.

The new rates amount to a “18-20 percent” increase on the silver plans, but OHIC also noted in a release that the office is also working to redirect federal subsidies to offset premium increases.

Federal Cost Sharing Reduction payments that had been previously paid to insurers to balance the Affordable Care Act’s health insurance marketplaces were discontinued by a recent executive order by President Donald Trump.

The focus of the increase on the silver-level plans was a move by OHIC to limit cost increases to consumers of silver-level individual plans. Individuals and families that earn between 138 percent and 250 percent of the federal poverty level will be eligible for tax credits to offset the increased premium costs, thus keeping the consumer cost similar to what had been in place with the CSRs. Since some people earn too much to qualify for the credits, they will have to either absorb the increased costs or change the coverage they purchase.

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“We have done everything we can to minimize additional costs for consumers resulting from this shortsighted action on the part of the president,” said R.I. Health Insurance Commissioner Marie L. Ganim. “But I want to make it very clear that the President’s decision to end these payments has already created unnecessary turmoil and threatened the stability of our health insurance market.”

Cory King, principal policy associate at OHIC, said his office has approved individual rates for Neighborhood Health Plan of Rhode Island plans in HealthSource RI by an average of 13.5 percent over 2017 rates, and at Blue Cross & Blue Shield of Rhode Island by an average of 20.3 percent. The approved rates were unchanged from the insurance companies’ original filing last week, he said.

The Congressional Budget Office expects the elimination of CSRs and the subsequent increase in tax credits to cost the federal government $194 billion over the next decade.

A legislative fix, such as the bipartisan effort to restore CSR payments in progress led by Tennessee Republican Sen. Lamar Alexander and Sen. Patty Murray, a Washington Democrat, would likely need to come before Nov. 1, when open enrollment begins, to affect 2018 rates said King.

After that date, the rates would likely remain unchanged until the next enrollment period next year for 2019, when the roughly $8 million in lost CSR payments added to the Silver plans would be subtracted from them.

HealthSource RI Director Zachary Sherman also announced that HSRI has rolled out a new “savings calculator” that can help Rhode Islanders understand their options and understand health care costs.

“Due to the Trump administration’s irresponsible decision, some customers will see significant changes to their health coverage options. We are encouraging customers to actively shop when Open Enrollment begins on Nov. 1,” said Sherman.

The savings calculator, he said, “allows individuals and families to factor in their desired maximum out-of-pocket cost and expected health needs, among other things, which is even more critical as plan options will look different this Open Enrollment.”

Health insurance rates for 2018 had previously been approved by OHIC. However, those rates had been calculated on the premise that the CSRs would be in effect.

More information about 2018 Open Enrollment can be found at HeathSourceRI.com.

Chris Bergenheim is the PBN web editor.

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