Health Insurance Markets Facing Instability As Rate Deadlines Loom

Last Thursday, Attorneys General from 15 states and the District of Columbia, including Maryland's Attorney General Brian Froshfiled a motion to intervene in a long-running lawsuit between the Administration and House Republicans over the legality of the cost sharing reduction subsidies included in the Patient Protection and Affordable Care Act. The Attorneys General said that they can not trust the Administration, which appears to view healthcare as a political bargaining chip, to act in the best interests of the states. The subsidies, known as Cost Sharing Reductions (CSRs), help low-income consumers use their insurance, by making payments directly to insurers to offset the costs of deductibles and co-payments. Ending these payments would have serious consequences for insurers, some of whom are already considering leaving the markets in 2018.  

On Monday, the White House agreed to continue paying the subsidies while the House of Representatives and Department of Justice asked the District of Columbia federal appeals court to keep the lawsuit that questions their legality on hold for another 90 days.

This delay imposes further uncertainty on the healthcare insurance market, just as insurers are trying to set their rates for the coming year. In Maryland, CareFirst is asking for rate increases of an average 50.4% on its HMO plans in Maryland and a 58.8% increase on average on its PPO plans. CEO Chet Burrell warned earlier this month that if cost-sharing reduction payments were to end, rates could increase by another 10 to 15 percentage points.

Approximately 83,000 Maryland consumers qualify for CSRs and about $97 million was paid to insurers to help make their health care affordable last year.