ANNAPOLIS — Medical claims costs in Maryland could jump 67 percent for residents’ individual policies by 2017 under the federal health-care overhaul, according to a study released Tuesday by the nation’s leading group of financial risk analysts. But a Maryland official said the study is flawed, because it doesn’t consider state-level policy decisions that will have a big impact on costs.
The increase cited in a report released Tuesday by the Society of Actuaries says much of the reason for the higher claims costs is that sicker people are expected to join the pool. The projected 67 percent increase is included in a hypothetical scenario in which all states decide to expand Medicaid under the overhaul.
The greater costs could mean higher insurance premiums for residents who will buy individual policies through Maryland’s health benefit exchange. The report does not project medical claim costs for employer-sponsored plans, which cover the majority of workers.
But a Maryland official says the report uses a one-size-fits-all-approach that skews what actual costs will be. Carolyn Quattrocki, executive director of the Governor’s Office of Health Care Reform, cited several factors expected to have an effect on rates in Maryland that are not considered in the report.
For example, Maryland is planning a gradual transition of high-risk enrollees into the state’s health exchange, a new insurance market that will offer residents a choice of private health plans. Quattrocki also said Maryland has a very large high-risk pool compared with other states, so the state has already taken care of many of its sickest residents. As a result, people who will gain coverage are not expected to be as sick as those in other states, Quattrocki said.
“The reason we think this report is not a good prediction of what rates will be in Maryland is because it does not account for several different important policy decisions the state has made to ameliorate pressure on rates,” Quattrocki said.
Quattrocki also noted that Maryland’s insurance commissioner has unusually strong authority to review insurance rates and modify them.
Maryland is moving forward with plans of expanding Medicaid coverage from 124 percent of the federal poverty rate to 133 percent. The House of Delegates passed a bill to do that on Monday by a vote of 93-43. The bill also creates a funding stream for the state’s health exchange. The Senate gave a similar bill initial approval on Tuesday.
Medicaid is estimated to be expanded to an estimated 91,000 people in Maryland next year and 143,000 by 2020. Under the exchange, about 147,000 people would be covered in 2014, with an estimated 284,000 covered in 2020.
Maryland now has an estimated 740,000 uninsured residents. The total amount of uninsured would be cut in half by 2020 under the health care overhaul, according to state estimates.