Maryland’s bid to lower health care premiums on the individual market through a reinsurance program could be paying off as Kaiser Permanente has refiled its rate request for 2019.
In its most recent filing, Kaiser has asked for an average rate decrease of 5.67 percent, a change from last May when the insurer asked for an average premium increase of 37.4 percent. These numbers are averages based on the prices across different products and age groups.
After significant premium increases last year, the state had sought to keep that from happening again in 2019 by asking the federal government for permission to set up a reinsurance program. Reinsurance programs lower premiums by reimbursing insurers for members with high claims costs. The program received approval last month.
It comes with an estimated $380 million in funding that state officials estimate creates the largest reinsurance poll in the country.
Last May’s insurance filings offered a window into what could have happened if the reinsurance program had not been approved. In addition to Kaiser’s rate increase request, CareFirst BlueCross BlueShield had asked to raise rates an average of 18.5 percent on its HMO products and 91.4 percent on its PPO products.
That would have followed increases of increases of 26 percent for CareFirst’s HMO products, 42 percent for its PPO products and 16 percent for Kaiser’s products last year. Those double-digit increases raised a lot of eyebrows across the state and helped spur the legislature to create the reinsurance program.
CareFirst’s post-reinsurance requests are not yet available, but the insurer has said it expects it could also ask for rate decreases with a reinsurance program in place.
While Kaiser has asked for a 5.67 percent decrease, that may not be the final number. Rate requests must be approved by Al Redmer, the Maryland Insurance Commissioner.
The Maryland Insurance Administration’s actuaries crunch their own numbers and share information back and forth with the insurers to help come to the final rate. By law, premiums must be sufficient but not excessive.
Changing circumstances could also affect rate changes. Kaiser has been concerned with how the reinsurance program would operate with the Affordable Care Act’s risk adjustment program. Particularly, they were worried about double payments to CareFirst because of the program.
Depending on how the insurance administration chooses to administer the dampening mechanism used to mitigate those double payments, those filings could change.
The filings also change as insurers get more information from what other insurers have put in their rate requests.
Still, Kaiser’s filing will be seen as a win for the state’s reinsurance effort, as the state has looked to corral premiums that have risen every year under the Affordable Care Act.
The insurance administration will hold a hearing next week on the revised filings and plans to finalize the 2019 rates shortly thereafter.
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