Washington State insurance companies are getting ready to set their rates for next year amid continued uncertainty over what happens in Congress.
Insurers have until Wednesday to submit their proposals to the Insurance Commissioner’s Office for the Washington Health Benefit Exchange and individual market. The proposals will be released to the public later this month, likely June 19.
The Insurance Commissioner’s Office will then spend the rest of the summer reviewing the proposed rate changes before giving final approval in the fall.
“I’m apprehensive, just because I know how concerned (insurers) are right now about the stability in the market,” Insurance Commissioner Mike Kreidler told KING 5.
“Unfortunately, you’ve got all of these variables out there,” he continued. “You’ve got Congress, but probably the one that’s getting everyone’s attention right now is what is the administration going to wind of up doing.”
Kreidler is referring to uncertainty over whether the Trump administration plans to continue funding Affordable Care Act subsidies known as cost-sharing reduction payments.
“If in fact it turns the feds withdraw that program, it can have an impact of 20% higher rates for some insurers,” said Kreidler.
However, for now, he’s telling health insurers to calculate their rates under the assumption they will be funded. The White House has given mixed signals in recent weeks over how they plan to proceeds with CSR payments, according to national reports.
Meanwhile, insurers are also still monitoring the latest developments in Congress regarding the GOP repeal and replace health care bill. Senate Majority Leader Mitch McConnell told President Trump on Tuesday that a health care vote in the Senate could happen before July 4.
However, other Senate Republicans have expressed skepticism that healthcare legislation will move forward this year.
“With that degree of uncertainty, you make the health insurers nervous,” said Kreidler. “The insurance companies by their very nature are conservative. They like predictability and stability in the market. We don’t have that right now, because of the volatility of all the discussions that are taking place at the national level.”
When asked if he believes rates will likely increase next year, he said it’s hard to imagine they wouldn’t.
“Insurance companies when there’s uncertainty like to boost their reserves, so they’re charging higher premiums to make sure they have adequate reserves in case the unexpected takes place. All of which does not bode well for the consumer. We plan to work very closely with the carriers going forward.”
Currently, there are more than a dozen insurers participating in the individual market in Washington State. The Insurance Commissioner is expected to find out this week whether any of them plan to pull out of the market, or exit specific counties.
Rate changes vary across counties, and rates are typically higher in rural counties based on a variety of factors including demographics, medical need and number of participants.
Washington residents get an average of $320 a month in federal subsidies to help cover insurance through the state exchange, according to analysis from the Washington Health Benefit Exchange. That’s based on data from all counties.
Data shows rates, under the Affordable Care Act, have declined since 2014 in the Seattle metro area for an average single 40-year-old at poverty level, according to analysis by the Kaiser Family Foundation.
Kaiser looked at how rates compared across cities for an adult non-smoker making $30,000 on a middle-tier health insurance plan.
In Washington State, that hypothetical individual would have paid $281 per month, before the tax credit, in 2014. In 2015, their rate dropped nearly 10% to $254 per month. It went down again in 2016 to $227 per month; then increased 5% to $238 per month in 2017.
Other states have not fared as well; some have seen dramatic increases, prompting the nationwide health care debate. The following analysis by the Kaiser Family Foundation explains some of the factors and show how cities compare.