The Illinois Department of Insurance released premium rates last week from the six insurers on the public health insurance exchange, revealing that many plans will probably cost significantly more in 2017.
For some people, however, the increased cost may be offset by a federal subsidy.
The federal Affordable Care Act of 2010 – nicknamed “Obamacare” by opponents – proposed state-level health insurance exchanges as a way for individuals and small businesses to easily shop for private insurance that meets certain standards. Individuals below a certain income may qualify for federal subsidies through the exchange as a way to make health insurance available to everyone.
Illinois failed to establish its own exchange, so the state partnered with the federal Department of Health and Human Services to jointly operate an exchange that first opened in October 2013 to enroll for the following year. So far, 335,243 people in Illinois have health insurance purchased through the exchange.
The Illinois Department of Insurance released an analysis of the 2017 rates on Aug. 24, showing large rate increases in most of the state. The rates won’t become official until they’re finalized by the federal Department of Health and Human Services in October.
The Affordable Care Act gives states the ability to review rate increases over 10 percent, but the law doesn’t actually give states the ability to block such increases. If an insurer raises rates more than 10 percent per year over the protest of state regulators, the insurer must post a justification for the increase on its company website.
For the cheapest “bronze” plan available to individuals on the exchange, the average projected increase is 44 percent statewide. The smallest increase would be in four collar counties surrounding Chicago, where the rate hike will range from 10 to 25 percent. In 46 counties, mostly in eastern Illinois, the bronze plan increase ranges from 25 percent to 40 percent. The remaining 52 counties – including Sangamon – will see rate hikes ranging from 40 to 60 percent.
For a 21-year-old nonsmoker in Sangamon County, the 2016 rate for the cheapest bronze plan was $176 per month, for a yearly cost of $2,112. The rate jumps 40 percent for the same individual in 2017, increasing to $247 per month, or $2,964 per year.
The cheapest “silver” plan would see an average increase of 45 percent, while the cheapest “gold” plan would increase in cost by an average of 55 percent.
Anne Melissa Dowling, acting director of the Department of Insurance, attributed the projected rate increases to several factors, like missed reimbursement payments from the federal government to insurers and the existence of insurance plans outside the public exchange which don’t meet the minimum coverage standards.
Congressman Rodney Davis, a Republican from Taylorville, was one of many Republicans who publicly criticized the Democrat-backed law following the announcement of the new rates. Republicans in the House have tried unsuccessfully numerous times to repeal the law.
“President Obama and Democrats in Congress promised the American people lower rates, more choices and better coverage under Obamacare, but my constituents are experiencing the exact opposite,” Davis said. “When you create a law that does nothing to address the actual cost of health care and discourages competition, you are going to continue to see costs increase.”
Prior to the rate release, U.S. Sen. Dick Durbin, a Democrat from Springfield, said at least one insurer, Blue Cross Blue Shield of Illinois, was considering leaving the exchange because of financial concerns. According to Durbin, the Department of Health and Human Services made several recommendations for Blue Cross Blue Shield to reduce costs and still maintain its offerings on the exchange.
The company ultimately remained in the market, but Durbin said after the rates were released that he is “troubled by the substantial premium increases” Blue Cross Blue Shield proposed.
“It is my hope that the premium increases being proposed for Illinois next year are a one-time occurrence to stabilize our individual market and that these increases will not be needed again in the future,” Durbin said. “If our insurers are unable to adapt and find ways to provide affordable coverage for Illinoisans, then I believe we must explore ways to improve state insurance regulation, come together on a bipartisan basis to strengthen the federal health law, and revisit whether it makes sense to offer a public insurance plan in counties lacking affordable options.”
As the rates were released, HHS said an estimated 62 percent of individuals will still be able to purchase a plan for less than $75 per month, thanks to federal subsidies which increase as rates increase.
“Headline rate increases do not reflect what consumers actually pay,” said Kathryn Martin, acting assistant secretary for planning and evaluation at HHS. “Our study shows that, even in a scenario where all plans saw double-digit rate increases, the vast majority of consumers would continue to have affordable options.”
HHS says that, following the implementation of the Affordable Care Act, health care costs have increased at the slowest rate on record and premiums in 2016 were actually 12 to 20 percent below what the Congressional Budget Office predicted.
Contact Patrick Yeagle at [email protected].
