After all the turmoil in the Obamacare market last year, Community Health Works CEO Fred Ammons was cheered on Friday to see the 2019 proposals come in from Georgia health insurance companies. The companies proposed modest premium increases and some healthy expansion of sales territory.
“It looks pretty good,” Ammons said. “I mean, maybe we’re seeing some stability.”
Then came this weekend.
Just as companies in Georgia and across the nation are negotiating their Obamacare offerings for next year with regulators, the Trump administration on Saturday announced a new kink. The companies say it will throw them back into uncertainty and may result in higher prices and less choice for customers.
Based on a federal court decision four months ago, the administration on Saturday said it would halt $10 billion in annual payments to insurers that help stabilize the market as they cover expensive customers with pre-existing conditions. The decision had said the administration was using an incorrect formula to calculate the payments; the administration said it decided to halt them altogether “until the litigation is resolved.”
“What I don’t know, what I’m not 100 percent clear about this is, is this short-term?” Ammons said. “We’re just going to cut it off until we figure out how to do it? Or is it permanent?”
Ammons, who oversees a nonprofit that helps fund health insurance guides, has hopes that companies have already baked turmoil into their formulas and won’t need to raise rates that much. Others are not so sanguine.
“They’re public companies, they’re not going to say to their shareholders, ‘Don’t worry about it, we’ll absorb the loss and pay you less,’ ” said Bob Smith, an insurance agent with North American Health Plans in Tucker. He points out that recent years’ increases were so huge that many people can’t afford the insurance without subsidies anyway; he has been selling alternative plans.
“Once again, the government is destabilizing the market,” Smith said. “Here it is 2018 and we’re still in a pickle.”
Kirk Lyman-Barner, a state leader in selling plans under Obamacare (also known as the Affordable Care Act), said he’s “skeptical” about the timing of the announcement, wondering whether it’s sabotage. His lower-income clients who qualify for subsidies will be fine, he said.
“I just continue to feel frustrated for the folks that don’t get a subsidy,” Lyman-Barner said. “Their options are getting narrower and narrower. They’re just getting priced out.”
The administration in its statement Saturday said it had no choice but to freeze the payments to comply with the Feb. 28 ruling.
The publication Modern Healthcare’s reporting from companies framed the announcement as “an eleventh-hour, arbitrary whiplash” and noted that the New Mexico court decision the administration cited in its move was not the only ruling on payments; there was another one that contradicted the New Mexico ruling.
The administration noted that its hearing to reconsider the New Mexico ruling was June 21.
The announcement came at a sensitive time, as insurers in Georgia have until Aug. 22 to finalize their plans. Until that date, the companies are permitted to make changes to the rates and sales territory they want, said Glenn Allen, a spokesman for the state Department of Insurance.
They say they’re already talking about it.
“I think we’re all trying to understand and plan after we saw the announcement over the weekend,” said Graham Thompson, a lobbyist for the insurance companies in Georgia. Georgia’s largest insurer on the market, Blue Cross Blue Shield of Georgia, and its parent company, Anthem, did not comment but referred a reporter’s questions to Thompson.
The announcement “certainly” could put upward pressure on premium prices, Thompson said. But even more so, he added, on which counties a company plans to serve — and whether it plans to stay in the individual market at all.
“We thought both the administration and the legislative activity had calmed a little bit,” Thompson said. “But that’s not the case. And we’re sort of trying to react in real time.”
In the proposals filed Friday, Blue Cross proposed to increase its footprint to 135 counties, returning to parts of metro Atlanta after it pulled out of the region and reduced its coverage area to 96 counties this year. Alliant proposed to add three counties, up from 24 to 27, Allen said. Ambetter and Kaiser Permanente both proposed to stay in the market, meaning no Georgia Obamacare insurer would pull out.
Their price proposals ranged from 2.2 percent to 14.7 percent, fairly tracking medical inflation. That’s down from significant increases the previous year, such as 57.7 percent for Blue Cross.
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