Increases Range From 20 To 85 Percent
Four insurance companies that want to sell individual policies next year on the New Mexico Health Insurance Exchange have filed their preliminary rates, and they’re looking for hikes ranging from 20 to 85 percent. But those rate requests will most likely change as Congressional Republicans work on passing their own health care bill.
The highest requested increase came from New Mexico Health Connections, the state’s cooperative insurance company that was formed under the provisions of the Affordable Care Act.
NMHC CEO Martin Hickey said the 85 percent increase request is a preliminary filing and will mostly likely be reduced in the future. The insurers will have until July 10 to file their final rate requests with the New Mexico Office of the Superintendent of Insurance.
Insurers are having a difficult time in formulating rates because of the uncertainty in Washington, D.C., over health care bills proposed by congressional Republicans. The Senate has delayed a vote on its health care bill until after July 4.
“In New Mexico, the Office of the Superintendent of Insurance (OSI) allows insurers to file an initial, preliminary set of rates, and then a second, final set. Our first round of rates had to take into consideration the level of uncertainty leading up to the day they were due, which was June 10,” Hickey said. “The second and final round of rates will be filed on July 10. NMHC is working with the OSI, and looking for greater clarity from Congress and the Trump administration in preparation for filing final 2018 rates, which we expect will be lower.”
The other insurers on New Mexico’s exchange have proposed smaller rate increases than NMHC. Molina Healthcare has asked for 21 percent increase. Christus Health Plan proposed a 49 percent increase, and Blue Cross Blue Shield of New Mexico asked for a 25 percent hike.
NMHC said there are several factors that go into its rates. They include:
— The possibility that the ACA’s mandate that everyone buy insurance might not be included in the Senate’s bill. Or if it is, it might not be enforced in 2018.
— The fact that young, healthy people are leaving the insurance market. “This creates an adverse selection wherein those who stay in the insurance market are typically sicker or need more care, which drives costs up for everyone,” NMHC said.
— The federal government might do away with the cost-sharing benefits of the ACA. Those benefits make insurance affordable to low-income families. If they are eliminated, the cost of policies could increase.
“Healthcare in the United States is going through a time of rapid change,” Hickey added. “Volatility in Congress has led to instability and uncertainty for insurers. We are being asked to establish rates and plans for 2018 without having a clear picture of what health care reform will look like. Insurers are in the business of managing risk, but making actuarily sound decisions on rates is very difficult under the current circumstances.”
About 55,000 New Mexicans bought individual policies on the exchange this year. About 80 percent of those receive some kind of federal subsidy to help pay for the policies and health care.
New Mexico Insurance Superintendent John Franchini is expected to approve the final exchange rates in September.
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