On Thursday, CareFirst, Maryland’s most prominent health care insurer, requested permission from state regulators to increase rates by an average 50 percent on health care plans purchased by people through Maryland’s official health insurance marketplace.
The remaining insurance providers on the exchange also requested rate increases, by the amount paled in comparison to CareFirst. Cigna Health and Life Insurance Company is seeking an average 36.36 percent increase, while Evergreen Health is requesting an average 27.8 percent increase and Kaiser Foundation Health Plan of the Mid-Atlantic States requests an average 18.08 percent increase.The request came last week around the same time the House of Representatives approved the American Health Care Act after weeks of back and forth negotiations. The new health care bill is an effort to address consumer concerns of soaring health care under the Affordable Care Act.
In response to the request, Chet Burrell, CareFirst CEO, said the insurance company did not charge nearly enough throughout the early years of health care reform. The large number of sick people buying plans continues to burden the insurance company. There is also the matter of higher than anticipated costs and the lack of healthy people entering the market, which are both needed to pay for people’s health care.
The commissioner of the Maryland Insurance Administration, Al Redmer Jr., will make the final decision of whether to approve or deny the request, which will be determined by the findings of a through review of all the filings.
Cigna said in a statement that its continuing participation in the health market would potentially depend on whether its rate hike request is approved.
“Our participation in the individual markets is contingent on the market conditions and regulatory approval,” Cigna said. “Approvals and final plan decisions typically take place in the third quarter and we will continue to assess our participation based on the evolving rules, regulations and design of the marketplace throughout this process.”
On Friday, the Maryland Insurance Administration announced that it would hire an independent actuarial firm, instead of utilizing in-house actuaries, to review the rate hike requests by CareFirst BlueCross BlueShield. A public hearing will also be included in the review process.
“ We want to make sure we get it right based on the gravity of those numbers,” Redmer said.
Typically insurance companies do not get the rates they request, but CareFirst has requested a very large increase, so the administration feels that this is the appropriate measure to take, just to make they get the right decision.
“We have a talented actuary team, but I just want to make sure based on the size of this request that we make the right decision, Redmer said. “I do not want to make a mistake.”
Redmer went on to say that double-digit rate increases could discourage people from buying plans through the Maryland Health Connection, as well as be troublesome for the market.
The final decision on the requested is expected to come before the end of summer.