Decisions made by the Maryland’s insurers and regulators could prevent most consumers from being significantly affected by President Donald Trump’s decision to stop paying cost-sharing reduction subsidies to insurance companies.
CareFirst and Kaiser Permanente have filed amended rate requests with the Maryland Insurance Administration to help recoup some of those damages. But they are doing so in a way they say will affect the fewest consumers.
“In an effort to minimize the damage, we have worked with the carriers,” said Al Redmer, the state’s insurance commissioner, at a hearing for the amended rate requests Monday morning.
CareFirst and Kaiser have filed additional rate increase requests of 18 and 8.2 percent, respectively. But those requests only apply to on-exchange silver-level plans. No other plans would see increases.
By raising premiums, the insurers hope to overcome what is projected to be a loss of $100 million.
The increases would only affect about 96,000 consumers on the individual health market in Maryland, said Todd Switzer, the insurance administration’s chief actuary. But because of how the Affordable Care Act exchanges work, even fewer consumers would actually pay more in insurance premiums.
By filing for increased premiums on silver level plans, the benchmark for advanced premium tax credits increases. Those credits go to consumers making between 100 and 400 percent of the federal poverty line. With that, as silver level premiums increase, tax credits will also increase.
Switzer estimated that 30 percent of the 96,000 consumers seeing increases would be completely protected by paying more money because of tax credits. Another 50 percent would get at least partial protection. And 20 percent, around 20,000 people, would get no “meaningful protection” from the premium increases.
Those consumers without protection from the tax credits should seek off-exchange plans through insurance brokers because those plans will not see rate increases, said Beth Sammis, a former acting insurance commissioner in Maryland and board member of advocacy group Consumer Health First.
“If you don’t qualify for a premium tax credit and you want to buy a silver plan, you will pay more if you buy it on the exchange,” she said.
But other consumers in Maryland could benefit from the increase in the cost of the benchmark plan, Sammis said. Bronze plans could become nearly free while gold plans also get reductions because tax credits will increase while rates remain the same.
“In some ways, I think it’s poetic justice,” she said. “People might actually have more options than they would have before.”
The biggest threat to Maryland’s health exchange from the Trump Administration’s decision to cut tax subsidies comes from confusion. With the open enrollment period opening next week, there is a short window to raise premiums without alarming consumers.
“I really hope that the message that’s driven home is that this is going to impact a very small number of people,” Sammis said.