Good news! The healthcare insurance market is showing the first signs of stabilizing – none too soon! Proposed 2019 premiums reflect the lowest increases since the 2014 implementation of ObamaCare – and in some cases they are actually lower.
After nationwide premium increases averaging 20% in 2017 and 34% in 2018, most insurers are now proposing only single digit increases for 2019. Single digit increases are being requested by major insurers in states like Florida and Mississippi while in some states, like Texas, Illinois, Arizona and North Carolina, insurers have proposed to actually cut some premiums for 2019.
Anna Wilde Mathews and Joseph Walker, writing in The Wall Street Journal, say the shift in premiums is particularly extreme in some states: like Wyoming where Blue Cross Blue Shield is seeking a 0.27% average decrease next year after a 48% increase this year. “The vast majority of our members will be seeing much lower rate increases this year,” said Mark Nave, a senior vice president at Highmark Inc., an insurer that is part of Highmark Health. The marketplaces “are stabilizing in spite of some of the challenges.”
Unfortunately, this good news will not apply to everyone everywhere. In Maryland, CareFirst Blue Cross Blue Shield proposed an 18.5% average increase for HMO plans and a 91.4% increase on smaller preferred provider organization (PPO) business. The insurer claims its rate proposals reflect the high health costs of enrollees in its plans.
Premium Increases 2018 v. 2019
Why are rates stabilizing?
In 2018, insurers over-reacted to the Trump Administration decision to halt payments to insurers that were being made by the Obama Administration even though those payments were not approved by Congress. They raised premium prices precipitously in anticipation of high costs. The lower rate increases in 2019 reflect the overestimation of those costs by insurers who can now live with little or no increases next year.
Liberals claimed the Trump Administration was determined to destabilize the market. In addition to halting the payments to insurers, the Trump White House pushed for more flexibility in short-term policies that are exempt from ObamaCare regulations. Congress also eliminated the Individual Mandate that forced everyone to purchase health insurance or pay a tax when they passed the Tax Reform Plan in 2017. Opponents claimed these moves would further undermine the ObamaCare exchange marketplace.
But these lower rates for 2019 prove that liberal claims of Trump destabilizing the market were unfounded. According to the Kaiser Family Foundation, last year insurers achieved their best financial results on plans sold to consumers since the ACA’s major market changes went into effect in 2014. The insurers’ improved finances have also led some to plan entering new ACA markets or expanding their footprints for 2019, after years of pullbacks.
These encouraging results certainly do not mean ObamaCare is thriving – nor providing the increased access to quality healthcare it was promised to provide. But it does mean there is some reason for optimism in the short-run while Congress considers ways to improve the system in the future. Most Americans can at least stop worrying about more major premium increases for 2019 – and that’s certainly good news!