New Mexico Insurance Superintendent John Franchini said HHS got its numbers wrong and that the increases will be much less. The second-lowest-cost silver plan for a 40-year-old in Albuquerque will be $182.94 a month, the second-lowest in the nation, Franchini said.
New Mexicans looking to buy health insurance on the state’s health insurance exchange will face some price increases when they begin shopping on Nov. 1, but exactly how much of an increase isn’t clear.
Late Monday, the U.S. Department of Health and Human Services released a study that said New Mexicans will face premium increases averaging 26 percent for certain individual plans beginning in 2016. That would give the state the fourth-highest premium increase for 2016 among the 37 states that use the federal exchange, healthcare.gov, according to HHS’s 2016 Marketplace Affordability Study.
Those increases are calculated for the second-lowest-cost silver plans, which are the benchmark plans used by the IRS to calculate premium subsidies.
But New Mexico Insurance Superintendent John Franchini said HHS got its numbers wrong and that the increases will be much less. The second-lowest-cost silver plan for a 40-year-old in Albuquerque will be $182.94 a month, the second-lowest in the nation, Franchini said.
“We were third before, but now we’re second-lowest,” Franchini told ABQ Free Press. He added that one New Mexico insurer on the exchange had a 14 percent premium increase for 2016, while another had a six percent hike. One carrier had no change in rates and a fourth had an overall 2 percent reduction, Franchini said.
And the second-lowest-cost silver plan for a 21-year-old in the Albuquerque area is $143.15 a month for 2016, a 6.3 percent increase from $134.18 in 2015, Franchini’s office said.
“We are working very hard to keep these costs down for policy holders in New Mexico,” Franchini said.
Franchini’s office said the incorrect number from HHS occurred because one insurer on New Mexico’s exchange, New Mexico Health Connections, missed an HHS deadline to submit its revised rates for the coming year. That missed deadline has skewed the average premium number upward, the office said. Officials added that the insurance superintendent was working with HHS to correct the numbers.
HHS’s report didn’t include the actual premium costs in the various states. Nationally, the average premium increase for 2016 is 7.5 percent.
The brunt of any premium increases in New Mexico will be felt by people in Albuquerque and Santa Fe where the average increase is 25 percent, according to HHS. In 2015, 52,358 state residents bought individual polices on the exchange. Of those, 45,069 lived in Albuquerque and Santa Fe.
While New Mexicans are facing premium increases for those silver plans, most won’t pay the full cost. In 2015, 72 percent of state residents who bought policies through the exchange were eligible for premium subsidies, according to HHS. Individuals are eligible for subsidies through the exchange if they make between 100 and 400 percent of the federal poverty level—11,770 to $47,080 for individuals.
About 35,000 New Mexicans will have to find a new insurer because Blue Cross and Blue Shield of New Mexico is basically getting out of the individual market for 2016. The company had asked for a 51 percent rate hike for its individual exchange plans, but Franchini denied that request. As a result, Blue Cross won’t be selling individual policies on the exchange for 2016. BCBSNM insured around 35,000 state residents through individual plans this year.
Three states have larger premium increases for 2016: Oklahoma, 35.7 percent; Montana, 34.5 percent; and Alaska, 31.5 percent.
Premiums fell in four states: Indiana, Maine, Mississippi and North Dakota.
— Dennis Domrzalski
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