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Op-Ed: Waffling in D.C. Means Higher Health Insurance Premiums for NJ

When rates jump as much as 50 percent, it’s unclear whether consumers on individual exchange in those states will be able to afford health insurance at all

christine stearns
Christine Stearns

Have you noticed what has been going on with health insurance premiums for the Affordable Care Act (ACA) marketplace plans around the country in the past few weeks? If not, you have been missing a disturbing trend. In the states where the rates have been filed for 2018, premiums are skyrocketing. When rates jump by as much as 50 percent, it calls into question whether consumers on the individual exchange in those states will be able to afford their health insurance coverage at all. There is no reason to think that New Jersey consumers will escape big increases in premiums next year.

Unless Washington takes action, the marketplace premium increases that will hit New Jersey families may be devastating. Based on early trends from other states, it is all but certain that New Jerseyans will see price hikes larger than any previously experienced.

Why are these increases inevitable unless Washington acts? It is simple. Washington has failed to commit to funding cost-sharing reductions mandated for those with lower incomes. That is coupled with the decision not to enforce the individual mandate — which makes it more likely that younger, healthier people will choose the risk of not being covered in exchange for the extra money not having to pay premiums puts in their pockets. Those leaving the individual market will also make the pool of insured individuals smaller and sicker. That means the same costs of care will now be spread among a smaller group. Moreover, the return of the federal Health Insurance Tax – which taxes health benefits for families and small businesses — will also add to the total cost of a policy. And that is all on top of medical inflation and typical annual increases in the cost of care.

On the rise

Big rate hikes have been announced in states where filing has already occurred. In Maryland, the state’s largest health insurer is seeking permission to raise rates by an average of about 50 percent. Two other insurers requested 37 percent and 18 percent increases. In Connecticut, filed rates are as high as 34 percent. Eight insurance companies in Oregon will increase rates up to 22 percent in 2018. Residents of the nation’s capital are facing increases up to 40 percent. In North Carolina, Blue Cross Blue Shield filed a plan with a 23 percent increase. They noted that if the federal government committed to funding the cost-sharing reduction subsidies — rather than have those subsidies absorbed into the rates paid by all who buy their policies through the exchange — their increase would have been 9 percent.

In addition to these significant premium increases, many health insurers are choosing to drop out of the marketplace. Twenty-five counties in Missouri will be in 2018. In Iowa, Medica just announced it would be exiting the market in 2018. That could leave 70,000 people who purchase their own health insurance without any coverage options next year. Tennessee is currently facing its own challenges in ensuring health insurance carriers will offer healthcare coverage on a statewide basis.

New Jersey has just two carriers — AmeriHealth and Horizon Blue Cross Blue Shield — serving the market in 2017. Let’s hope both have the will and means to ride out the uncertainty and instability that has driven so many others out of New Jersey’s market.

Increases ahead

New Jersey families have done nothing to deserve these rates hikes. Further, our individual consumer and small business health-insurance markets have been largely successful at keeping rate increases in check. In fact, New Jersey has the lowest total increase since the exchanges opened, which is great news in a state known for its high cost of living. Unfortunately, the 300,000 New Jerseyans who buy coverage through the marketplace will likely see substantial increases.

New Jersey families, and those across the nation, will be hit hard by skyrocketing rates. We need Washington to act to avoid the increases that it triggered. We also need our elected officials to see the urgent need to foster greater competition and help stabilize the marketplace.

The clock is ticking, especially in New Jersey. Rates must be submitted to the Department of Banking and Insurance in a few weeks. Before we know it, open enrollment will begin. There are several hundred thousand New Jersey residents who rely on the market to purchase their health insurance. Through no fault of their own, they are about to get slammed by rate hikes. If Washington does not act, these skyrocketing rates are guaranteed.

Christine Stearns is the executive director of Better Choices, Better Care NJ, and is a director in the Government Affairs group for Gibbons P.C., a leading New Jersey law firm. For further information on Better Choices, Better Care NJ, follow us on Twitter (@BCBCNJ) and Facebook (Better Choices, Better Care NJ).

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