Copyright © 2017 Albuquerque Journal
New Mexico will let health insurers submit two different sets of rate requests for their Obamacare plans for 2018 because of the continued uncertainty over the fate of the Affordable Care Act.
The clock is ticking for health insurers to figure out their 2018 plans and rate requests for participation in the New Mexico state-run exchange, beWellnm.
As the deadline approaches, the greatest concern is not knowing whether the money for cost-sharing reduction payments will be made available from the federal government in the coming year. Those payments help subsidize out-of-pocket costs for low-income enrollees and make it feasible for the insurers to offer plans.
Companies that sell coverage through the New Mexico Health Insurance Exchange, also known as beWellnm, now have until mid-June to file their rate requests or choose not to, an extended time frame proposed last month by the Centers for Medicare and Medicaid Services so insurers could better assess their markets.
Those filing requests will offer the first insights into how much they intend to charge consumers for different plans next year, according to the state’s top insurance regulator.
“We’re watching what takes place in Washington like everybody else is,” said John Franchini, New Mexico’s superintendent of insurance. “I hope they’re preparing to be in the market, but that could change,” he said of the health insurance carriers now offering policies. They are Blue Cross Blue Shield of New Mexico, New Mexico Health Connections, Molina Healthcare and Christus Health Plan.
Ending the subsidies, a signature element of the Affordable Care Act, will cause many consumers to drop coverage, said Franchini.
Cost-sharing is a financing mechanism that reduces deductibles and co-pays for lower-income people so they can get care. If the mechanism goes away, that would mean hundreds or thousands of dollars a year in extra expenses that many currently enrolled state residents can’t afford, said Franchini.
“I think most of the companies are looking for ways to stay in the market. But those cost-sharing subsidies are critical,” said Franchini. If the subsidies don’t survive, Franchini says some insurers are likely to pull out of the market, or they will have to increase costs for New Mexico’s 55,000 exchange enrollees.
The payments, made directly to insurers, are expected to cost $7 billion this year.
Franchini didn’t have a breakdown of how much of that money makes its way to New Mexico. With the subsidies, “the four carriers in the exchange now are close to breaking even,” said Franchini.
Figures released by the U.S. Health and Human Services Department show that 69 percent of New Mexicans who have enrolled in a plan through the state’s insurance exchange qualified for financial assistance.
New Mexico uses the federal enrollment platform at HealthCare.gov for individual enrollments. For small businesses, New Mexico has its own SHOP exchange enrollment platform.
Health insurers in New Mexico are busy crunching the numbers they need to price premium rates for this coming year. Franchini said the deadline extension allows carriers to drill down on enrollment and claims data to better price next year’s plans – or deep-six this line of business. They are calculating “medical cost inflation” for 2018 – from hospital systems, medical groups, pharmaceutical companies and ambulance agencies.
Only one of the exchange health insurers, New Mexico Health Connections, a nonprofit co-op, confirmed that it will file premium rates for plans in the 2018 coverage year, but it is hedging its bets by submitting two sets as allowed by the superintendent.
The co-op, by virtue of its startup loan from Uncle Sam, is obligated to submit premium rates and plans. However, CEO Dr. Martin Hickey said the co-op is planning to file a set of rates with higher premiums that assume the Trump administration won’t make those subsidy payments in the coming year, which benefit 46 percent of its exchange members.
“Time is not a friend here. Continued indecision and delay (on the part of policy makers) forces us to build in the worst-case scenario,” said Hickey. He declined to say how high those rates could be in 2018 for co-op customers, but one organization has ventured a guess.
In its annual study on ACA participation, most carriers doing business in the health care exchanges will remain on them in 2018, according to consultant Oliver Wyman. Half of them said it was too early to determine how to price plans for the upcoming enrollment year; the other half said to expect hikes in the single digits to greater than 30 percent.
Blue Cross Blue Shield of New Mexico has not made a final decision about its 2018 exchange market participation or product offerings. “We will make these decisions once we have more information about certain legislative and regulatory changes that could impact the individual market,” Blue Cross said in a statement.
Molina Healthcare, which has Medicare and Medicaid customers in New Mexico, is also evaluating its options for staying or pulling out of the Obamacare exchanges in 2018. “We expect to decide upon 2018 pricing, geographies and product offerings in the coming weeks,” said Interim CEO Joe White in a statement.
Christus did not respond with a comment.
Presbyterian Health Plan, a for-profit subsidiary of Presbyterian Healthcare Services, did not offer plans on the exchange in 2017.