Individual Health Ins. When’s Who’s and What’s

This particular blog post is primarily directed to residents of my adopted home state of Nebraska. However it may shed light on some of the “when’s, who’s and what’s” that health care/insurance stakeholders may be facing in other parts of the country next year.

As we inch closer to the 2018 individual health insurance open enrollment season (WHEN – November 1, 2017 – December 15, 2017), we’re beginning to see WHO is going to be selling individual health insurance throughout the country (in NE – Medica Health only).  Unfortunately, there are a number of counties throughout the country that will not have a health insurance seller.  Hopefully, some regulatory changes that have been implemented at the federal level…
(see – …may encourage more insurers to re-enter those and other counties.

In a clear sign of the times, there are three (3) separate and distinct factors that could significantly impact health insurance cost and coverage in 2018.  Interestingly, some insurers are even resorting to filing separate sets of premium rates with the departments of insurance, that vary based on “scenario”. These three (3) factors are based on whether or not the federal government…

  1. continues to collect tax penalties associated with non-compliance of the so called individual mandate (i.e., non-exempt folks that don’t purchase health insurance); 
  2. continues paying insurers subsidies to offset plan related out of pocket costs such as copays, deductibles and coinsurance, for those that are eligible for such subsidies (based on income); and
  3. implements a reinsurance program to offset some of the higher costs associated with treating the chronically ill.
The impact of the rate increases filed by Medica Health in NE (and around the country by other insurers) is largely dependent on whether insured individuals are eligible for, and receive premium subsidies.  For example in NE, increases filed by Medica Health (if approved) could reach as high as 60+% (WHAT?) for those that are not currently eligible for premium subsidies (estimated at 20% of the ACA compliant insured population in NE).  Those who qualify for subsidies, which vary based on income, could see little or in some cases, no effect of the rate increases, because the subsidies increase commensurately with premium hikes.  Here are some examples:
Omaha, NE 2017 2018
For a 25-year-old making $30,000
Premium $289.42 $454.96
Subsidy $86.22 $251.76
Monthly cost to member $203.20 $203.20
For a 40-year-old (no subsidy)
Premium $368.40 $579.12
Subsidy $0 $0
Monthly cost to member $368.40 $579.12
For a 60-year-old making $36,000
Premium $782.73 $1,229.83
Subsidy $494.55 $942.04
Monthly cost to member $287.79 $287.79
Source: Omaha World Herald, Steve Jordon

At the time of this writing (August 2, 2017) these rates are merely “filed”, and not yet “approved” by the Nebraska Department of Insurance.  However, recent history tells us (notwithstanding the aforementioned 3 factors) insurance department’s have been approving health insurance premium rate filings.  In addition, these renewal rates provide a glimpse of WHAT new business rates might look like for those newly entering the individual health insurance market next year, and those moving from insurers like Aetna and Blue Cross Blue Shield of Nebraska who have exited both the exchange and non-exchange markets for 2018.