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Md. insurers in individual marketplace seek 11.2% rate hike

‘It is clear from our ongoing monitoring of industry experience that 2021 claims were heavily influenced by COVID-19,” says Maryland Insurance Administration Commissioner Kathleen A. Birrane. (The Daily Record / Bryan P. Sears)

All the carriers selling health insurance on Maryland’s individual marketplace have proposed premium rate increases this year, a result of COVID-19’s impact on health care claim costs.

CareFirst BlueChoice, the largest provider on Maryland’s individual market, with 149,043 members in the state, is requesting an average rate change of 11.2%. Under this proposed increase, a 40-year-old in the metropolitan Baltimore service area enrolled in CareFirst BlueChoice’s least-expensive silver plan would go from paying $323 per month in 2022 to $353 in 2023.

In a filing with the Maryland Insurance Administration, the company attributed the need for a rate increase to “1) increase in the base period claims experience, 2) trend, 3) 1332 State Innovation Waiver for reinsurance, 4) projected morbidity, and 5) increases in the assumed plan actuarial values.”

Overall, CareFirst’s Group Hospitalization and Medical Services, Inc. and CareFirst of Maryland, Inc., are requesting an increase of 25.9% for the same reasons.

The marketplace’s last two insurers, Kaiser and UnitedHealthcare are requesting rate changes of 7.2% and 8.7%, respectively.

Overall, insurers in Maryland’s individual market created under the Affordable Care Act – sometimes referred to as Obamacare — proposed raising their premiums an average of 11%. The changes will impact more than 240,000 Maryland insurance holders who receive their health coverage through the individual marketplace (the large majority of Marylanders are insured through an employer).

All the companies’ requests are significantly higher than last year, when the highest average rate change request came from CareFirst BlueChoice, Inc., which requested only a 7.9% rate increase.

In the news release, Maryland Insurance Administration Commissioner Kathleen A. Birrane attributed the increase to the pandemic’s impact on insurance claims.

“It is clear from our ongoing monitoring of industry experience that 2021 claims were heavily influenced by COVID-19, and that the significant differences between where we were in 2021 and where we are likely to be in 2023 must be modeled and taken into account in rate development,” she said.

This wasn’t as much of a consideration during rate development last year because that process utilized 2020 claims. Although 2020 included a surplus of claims filed by COVID-19 patients, those were offset by patients who deferred care, afraid or otherwise unable to go into hospitals and doctor’s offices during the pandemic.

Last year’s claims, however, include both high volumes of COVID-19-related claims and high levels of claims from patients finally receiving care they deferred during the early parts of the pandemic, according to MIA spokesman Craig Ey.

“Carriers last year projected that non-COVID utilization would bounce back to ‘normal’ levels and COVID costs would increase relatively normally,” Ey said in an email.

Some of COVID-19’s direct costs were also higher in 2021 than they were in 2020, thanks to the added cost of vaccinations and some hospitals increasing the cost of treatments.

Ey said it is too early to analyze whether these trends are consistent across states, as only Maryland, Vermont and Oregon have received their 2023 rate proposals thus far.

MIA’s actuarial team, which evaluates the proposed rate increases, plans to request more data and analysis regarding how many insurance claims in 2021 can be attributed to COVID-19 and whether adjustments are necessary.

The administration will hold a public hearing on the proposed rates in July, and the commissioner will approve, disapprove or modify the proposed premiums by September.