Unusual but welcome: Two health insurers opt to cut exchange rates
Two of the four health insurers in the 2019 Georgia insurance exchange, in a surprising move, are set to make reductions in monthly premiums from the rates they offer this year.
Such decreases in insurance rates rarely occur in health care.
The overall premiums announced Thursday, as approved by the state insurance commissioner, show the relative stability of the state’s exchange, created under the Affordable Care Act for people without job-based or government insurance.
Alliant Health Plans’ premiums will drop by 10 percent, and Anthem Blue Cross and Blue Shield will have a .3 percent decrease, under rates sent this week by the state regulators to federal officials for review. Approval by the feds is virtually certain.
Those two companies reduced their requested rates from proposed increases of 5.7 percent and 2.2 percent, respectively, in their initial submissions to state insurance regulators earlier this summer.
The other two health insurers in the exchange maintained their initial rates through the approval process. Ambetter of Peach State will offer premiums that are 8.8 percent higher, while Kaiser Permanente kept its original 14.7 percent premium hike for next year’s exchange.
Those increases may reflect the two insurers’ making rate adjustments after adding more customers in metro Atlanta, since competitor Blue Cross exited the exchange market for that area this year.
The new Georgia rates come after sharp increases a year ago of more than 50 percent for all four insurers on the state exchange.
The new rate structure “is an indication that insurers are now comfortable with the pool of people buying insurance through the exchange,” said Bill Custer, a health insurance expert at Georgia State University.
Insurers “may have overreacted last year” in their big increases in premiums, Custer said.
“Insurers are actually making money on this market,” he said. “The underlying comfort with the exchanges nationally has clearly improved. In Georgia, we’re actually seeing competitiveness.”
About 480,000 people bought coverage this year through Georgia’s exchange, which like most state exchanges is run by the federal government.
Mark Mixer, CEO of Alliant Health Plans, cited the Trump administration’s restoration of the “risk adjustment” payments for insurers as a “driving factor” in the nonprofit’s lowering of its original proposal for premiums. The White House froze this funding in July in response to a court decision, then reversed itself.
“Insurance companies try to protect themselves on the risk side when there’s tremendous instability,” Mixer said Thursday. “Nationally, there’s all indications that the market is stabilizing.”
Alliant, a nonprofit based in Dalton, covers about 40,000 Georgians in a North Georgia arc of 24 counties. Mixer said Alliant is the only exchange insurer in that region this year, but will face competition there from both Blue Cross and Ambetter next year.
Blue Cross, which pulled out of 74 of Georgia’s 159 counties for this year’s exchange, is expected to provide coverage in 2019 in 135 counties. Those include most of metro Atlanta, where Blue Cross does not currently offer exchange plans.
A Blue Cross spokesman did not immediately respond to a request for comment Thursday on the company’s exchange premiums.
Federal officials are expected to approve the state premiums about a month from now.
Custer of Georgia State said the biggest beneficiaries of the lower rates are those people whose incomes are above 400 percent of the federal poverty level — about $48,000 for an individual, and about $98,000 for a family of four. Such people are not eligible for subsidies or discounts in the exchange, and must pay the full premium.
There’s still some uncertainty surrounding the exchanges. For one thing, the ACA’s legal requirement for health insurance will end next year. That means some people, including current exchange customers, could choose to buy no coverage at all. Another factor is the White House decision to open the door to alternative types of coverage, the kind that insurers say could pull healthy enrollees out of ACA plans.
In addition, Georgia and 19 other states are challenging the ACA in court. The administration has asked the courts to strike down key elements of the law, including the current protections for consumers with pre-existing medical conditions.
Laura Colbert of the consumer advocacy group Georgians for a Healthy Future, which supports the ACA, said Thursday that the rate changes “are encouraging signs for Georgia consumers who have had to shoulder several increases over the last few years.”
“The modest rate adjustments are a bit surprising because of the federal administration’s antagonistic stance toward the Affordable Care Act’s insurance markets,” she said. “If the federal government had used a more hands-off approach, all Georgia consumers could have expected rate decreases this year and those decreases would likely have been more dramatic than those approved for the coming year.”
Separately, a congressional watchdog said Thursday that the Trump administration needs to step up its management of exchange sign-ups, after mixed results last year when GOP lawmakers were trying unsuccessfully to repeal the health law, the Associated Press reported.
The report from the Government Accountability Office found problems with consumer counseling and advertising and recommended such basic fixes as setting enrollment targets, AP reported. On the other hand, it credited administration actions that did help people enroll, such as a more reliable HealthCare.gov website and reduced waiting time for people using call centers.
Exchange sign-ups for 2019 begin this November.