The Maryland Insurance Administration held a second rate review hearing on Monday to address the revised increase on rates requested by CareFirst. Sarah Li, Chief Actuary for the Maryland Insurance Administration, opened the hearing with a number of specific questions including some that advocates share:
Why are CareFirst's Maryland premiums so much higher than those for DC subscribers?
Are Marylanders being asked to subsidize DC residents' premiums, as the DC Insurance Commissioner has frozen CareFirst's rates for 2017?
CareFirst CEO, Chet Burrell, offered a detailed explanation of the revised rate request, citing nearly $300 million in losses during their first three years in the exchange and an "older, sicker" population than anticipated. He also stated that there was no subsidization of DC residents by Maryland consumers, and that the lower rates in DC were largely due to the fact that, unlike in Maryland, DC's risk pool includes small groups as well as consumers in the individual market.
In response, several consumers provided their individual perspectives on the negative impact CareFirst's requested rates would have on their own families and others like them, including small businesses who insure through the individual market. Chris Jakubiak, president of Jakubiak & Associates, Inc., has put off hiring additional employees because of the cost of health insurance, and Dan Meszler, a self-employed engineer, has had to leave the market entirely. Other consumers provided written comments on-line, as did the Health Education and Advocacy Unit of the Attorney General's Office, noting "Consumers who stay in these individual plans ... will never get their money back if excessive increases are allowed based on inaccurate or erroneous data and assumptions."
Consumer Health First first presented its case for rejection of the rate request in its Baltimore Sun OpEd. At Monday's hearing, we strongly urged Commissioner Redmer to not only reject CareFirst's new request, but to cut its initial request. Jeananne Sciabarra, Executive Director, was joined by Jay Angoff of Mehri & Skalet, who prepared our initial analysis. They reiterated the negative impact that the proposed premiums would have on consumers' pocketbooks and then laid out a substantive case for rejecting the CareFirst request. In addition to the affordability issue, they noted:
Rate increases of this magnitude will push the healthiest consumers from the market altogether, or to other carriers, leaving CareFirst with only the sickest members, thus requiring large increases next year, and so on. In addition, these rates will discourage the young and healthy from entering the market, disrupting one of the core principles of the Affordable Care Act.
These rate increases contradict the CMS report from last Thursday showing that, nationwide between 2014 and 2015, there has been little change in the cost per enrollee in the ACA individual market.
As Mr. Angoff noted "There is just such a disconnect of such a magnitude between the CMS data and the CareFirst data, it just doesn't make sense."
For a complete summary of Ms. Sciabarra's testimony, click here.
Worried about what the impact of higher insurance rates may mean for you and your family? Read our in-depth Rate Review Analysis to learn more.