Nine insurance companies have asked the state Insurance Department to approve double-digit rate hikes for individual and small business health insurance plans that start in 2023. The proposed average individual rate request is a 20.4% increase compared to 8.6% in 2022.
The department “has received 13 rate filings from nine health insurers for plans that will be offered on the individual and small group market, both on and off the state-sponsored exchange, Access Health CT,” Insurance Department Commissioner Andrew Mais said. “Working within the authority granted to this department, we will closely examine these filings to make sure the requested rates are consistent with state law.”
ConnectiCare Benefits is proposing an average 24.1% increase for its individual plans offered on the exchange.
The company argues it’s because the demand for services has increased. That factor is expected to have a projected impact of 12.1% on the insurer’s claims costs, according to their filing. They also point out the subsidies offered under the American Rescue Plan Act put in place in 2021 are expected to go away in 2023. They say they expect fewer customers to be qualified for the advanced premium tax credit and they expect consumers will leave the individual marketplace.
As a result of the departure of customers, the insurance company expects the average morbidity of the risk pool to go up and lead to an unfavorable impact on the 2023 rates.
More than 75,000 individuals are now covered by that plan. The company is also requesting a 23.6% increase for its individual plans marketed outside the exchange. The company is also requesting a 22.9% increase for its on-exchange small business plans and a 24.5% increase for small group plans marketed outside Access Health CT.
Anthem Health Benefits, the other insurer that offers plans on Connecticut’s exchange, is asking for an average 8.6% increase for its on-exchange individual plans.
The company says about 9.2% of that increase can be attributed to medical cost inflation, provider contracting changes, and an increase in demand for those medical services. The plan currently covers about 27,698 individuals.
Anthem is requesting an average increase of 3.6% on small group health plans for employers with 50 or fewer workers.
Cigna Health and Life Insurance Company filed a request to increase rates an average of 19.64% on small group policies. Oxford Health Insurance requested a 13.4% increase for health plans used by 50 or fewer workers and a 15.7% increase for HMO plans used by 50 or fewer workers.
UnitedHealthCare Insurance company requested an average rate increase of 13.9% for small group plans. And Aetna Life Insurance Co. submitted a rate filing for an increase of 14.1% for small group indemnity plans that provide major medical and prescription drug coverage for employers with 50 or fewer workers.
Harvard Pilgrim Health Care and HPHC both decided to leave the Connecticut market and will no longer offer new business small group health plans. They will only renew existing plans through the end of their appropriate plan years.
Sen. Matt Lesser, co-chair of the Insurance and Real Estate Committee, said these proposals are “jaw dropping.” He said they will have a serious impact on small businesses and individuals and he wants to make sure the Attorney General and the Healthcare Advocate are involved in the rate review process.
Attorney General William Tong is requesting a formal hearing on the rate proposals because they exceed 10%.
“Healthcare costs and insurance premiums are already unaffordable for many Connecticut families, businesses and individuals, and these double-digit rate hikes demand rigorous scrutiny,” Tong said. “The Department of Insurance has previously agreed to hold public rate hearings on any rate increase exceeding 10 percent, and that transparency is certainly needed now. We cannot simply allow insurers to assert costs and claims without our own independent analysis and review.”
“They owe the public an explanation and they should provide one if they want to get any rate increase,” Lesser said.
As far as solutions go, the Connecticut General Assembly offered few if any answers this session about how to solve the problem of escalating health care costs.
Republicans blamed Democrats for not taking action.
“These proposed rate increases are staggering and infuriating,” Senate Republican Leader Kevin Kelly and Sen. Tony Hwang, said. “They show not only the growing damage of inflation, but also the damage of CT Democrats repeated refusal to address rising health care costs. We knew this day was coming, we warned it was coming, and that’s why CT Republicans offered solutions to prevent it – solutions Democrats repeatedly rejected.”
They added: “”This year, Senate Republicans once again proposed a plan to rein in out-of-control health care costs. Access Health CT’s own estimates show our plan reduces premiums by $6,475 per year, or $540 per month for the average family. But leading Democrats on the state’s Insurance Committee refused to even hold a vote on that plan.”
Democrats in turn blamed Republicans.
“These rate requests show that my colleagues, including almost every Republican, who believed the industry that reform wasn’t needed and who fought the Public Option were hoodwinked,” he said.
“The system is fundamentally broken,” Lesser said. “The rate increases they’re proposing today is proof positive the market isn’t working.”
He added: “This outrageous proposal is proof they need to be rescued from themselves.”
Healthcare Advocate Ted Doolittle said he’s also calling for a formal hearing the rate hikes.
“The Office of the Healthcare Advocate believes that any premium rate request based on excessive medical costs is itself by definition excessive,” Doolittle said.
He said they need to “explain and justify the internationally abnormal, inflation-fueling prices underlying these massive rate requests.”
The Insurance Department will review the proposals and make a final decision — likely in September — for rates that will take effect on Jan. 1. There is a 30-day public comment period that starts today.
Click here for the rate proposals and to comment on them.
Insurance companies that sell policies on and off Connecticut’s Affordable Care Act exchange are seeking an average increase of 20.4% on individual health plans next year, alarming advocates who fear people will forgo insurance because they can’t pay.
The rate hike requests were released by the state Insurance Department Friday. On small group plans, the carriers are asking for an average increase of 14.8%.
The requested increases are substantially higher than those sought last year for 2022 health policies. Carriers in 2021 asked for an average hike of 8.6% on individual plans and 12.9% on small group plans.
“It’s jaw dropping,” said Lynne Ide, program lead for communications outreach and engagement at the Universal Health Care Foundation of Connecticut. “Looking at these rate requests, the ranges are off the charts.
“Our big concern right now is, coupled with inflation and the fallout from COVID, these proposed increases spell trouble. Our concern is that people will take a look at this and decide to go without health coverage, because they just can’t afford it.”
“My jaw hit the floor, obviously,” added Ted Doolittle, the state’s health care advocate. “I’m deeply concerned that people will go without coverage because of these high prices. It is incumbent on the insurance companies and the providers to explain to the people in the state why this is inevitable and there is no alternative.”
Three insurers are selling policies on the exchange: Anthem Health Plans, CTCare Benefits Inc., and ConnectiCare Insurance Company Inc.
Anthem requested an average increase of 8.6% for individual policies that cover 27,698 people. The proposed changes range from a decrease of 1.8% to an increase of 16.1%, depending on the plan.
The company also sought an average hike of 3.6% on small group policies that cover 19,271 residents. The suggested changes range from a decrease of 1.2% to an increase of 26.3%.
CTCare Benefits asked for an average hike of 24.1% on individual plans that cover 75,003 people. Proposed changes range from an increase of 18.7% to 33.2%, depending on the policy.
It also sought an average hike of 22.9% on small group plans that cover 3,476 residents (increases range from 20% to 28.9%).
ConnectiCare Insurance Company, which only sells individual policies on the exchange, requested an average increase of 25.2% for plans that cover 8,782 people. Suggested hikes range from 17.1% to 32.2%.
The proposed increases “don’t seem to make any sense,” Ide said. “Why one carrier would be asking for 8.6% in the individual market on average, and 3.6% in the small group market, and the other carrier is asking for a 24% and 22% in those two markets – it looks like they pulled the numbers out of a hat.”
Proposed increases for plans that are off the exchange are also varied, as the chart below indicates.
Kimberly Kann, a spokeswoman for ConnectiCare, said medical and pharmaceutical costs were some of the factors driving the rate hike request.
“We remain extremely mindful of the impact that rate increases have on our members and strive to keep our plans as fairly priced as possible within the reality of today’s health care environment,” Kan said in a statement. “Our proposed rates are based on several factors, including medical and pharmacy cost trends, along with the continued impacts of COVID-19 on our members’ utilization of services, including obtaining delayed care. Also, the legislative and regulatory environments continue to present market challenges outside of the company’s control, including the loss of the enhanced Advanced Premium Tax Credits provided through the American Rescue Plan Act set to expire in 2022, and state-mandated benefits.”
“We’re proud to have been offering individual plans from the beginning and look forward to continuing to serve people who need these plans,” Alessandra Simkin, a spokeswoman for Anthem, said in a statement. “Our filing reflects our experience and ability to deliver on behalf of consumers in this market and we look forward to working with the state as we continue the regulatory process.”
The insurance department will hold a hearing in early August at which insurers will have a chance to testify on the reasoning behind their proposed increases, and the public will be able to weigh in as well. A date has not yet been set for the hearing.
In addition to the carriers, Doolittle said pharmaceutical company officials and medical providers should attend and provide their rationale for rising costs.
“We’re in a medical cost crisis,” he said. “The rate review process is the one opportunity, the one public forum, that the people of Connecticut have to ask, ‘Why? Why are these hospital prices so high? Why are these drug prices so high?’ The premiums are simply a reflection of the underlying high medical costs.”
“Health care costs and insurance premiums are already unaffordable for many Connecticut families, businesses and individuals, and these double-digit rate hikes demand rigorous scrutiny,” Attorney General William Tong added in a statement. “The Department of Insurance has previously agreed to hold public rate hearings on any rate increase exceeding 10 percent, and that transparency is certainly needed now. We cannot simply allow insurers to assert costs and claims without our own independent analysis and review.”
The public can also submit comments online. Comments may be submitted here (under each policy, click the “select” button and fill in the “comments” box, then hit “submit comment”).
Officials with the insurance department will make a decision on rates for 2023 plans later this year, typically in September. Last year, though carriers sought an average increase of 8.6% on individual plans, the department instead granted a 5.6% average hike.
Open enrollment for 2023 health policies begins Nov. 1.
In the wake of the Supreme Court's ruling in Dobbs v. Jackson Women's Health, employers are questioning what impact, if any, this decision will have on their group health plans. In the Dobbs decision, the Supreme Court reversed 50 years of precedent by ruling that the Constitution does not provide for a right to abortion and therefore that states have the Constitutional right to legislate abortion. How, then, does this ruling impact employer-sponsored group health plans? In this alert we address four items of immediate concern and expect to supplement this analysis as this drastic change in the law develops.
1. Must a Group Health Plan Provide Coverage for Abortions?
There are no federal laws or regulations that require an employer-sponsored group health plan to provide coverage for elective abortions. The Patient Protection and Affordable Care Act of 2010, as amended (ACA), set forth standards that require coverage of "essential health benefits" for fully insured non-grandfathered plans. In addition, the ACA eliminated annual and lifetime dollar limits on such essential health benefits for all group health plans, including self-insured plans. At present, elective abortions would not be deemed essential health benefits. The determination of which medical expenses are and aren't "essential health benefits" is made by the U.S. Department of Health and Human Services, an administrative agency under the Executive Branch, and such guidance could change the definition to include elective abortion. In such event, the only employer-sponsored group health plans that would be subject to the change are those that are both non-grandfathered and fully insured.
2. May Group Health Plans Still Provide Coverage for Abortions, Even in States Where Banned?
Upon first impression, it appears that the broad preemptive provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA), should allow for group health plans to continue to provide coverage for abortions, whether elective or necessary, regardless of any state law prohibiting the procedure. ERISA is the federal statute that attempts to set uniform standards for the laws governing employer-sponsored benefit plans and applies to all employer-sponsored benefit plans, except those sponsored by non-electing churches and federal, state, and local governments. ERISA contains broad language that preempts "any and all state laws" that "relate to" an employee benefit plan, with the exception of the states' right to regulate insurance. Thus, if an employer group health plan provides coverage for abortion, then the plan should not be affected even though some states in which the employer has employees may ban abortion procedures.
3. Can Group Health Plans Provide Coverage for the Travel Expenses to a State Where Abortion is Legal?
To the extent that travel expenses are allowable under the Internal Revenue Code, then a group health plan (or health reimbursement account) should be able to provide this coverage. Many group health plans provide reimbursement for eligible travel expenses for participants who must obtain medical care outside their geographic home. However, the tax treatment of those benefits turns on whether the amounts are treated as exempt from tax under Section 213 of the Internal Revenue Code of 1986, as amended (Code).
Code Section 213(d) excludes from taxable income amounts reimbursed for expenses for medical care of an individual, the individual's spouse, or a dependent under a policy of insurance or group health plan. This exclusion defines "medical care" as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body.
Under current applicable law, a group health plan that reimburses or directly pays the "travel expenses" for "medical care" should be exempt from the taxpayer's taxable income and otherwise deductible by the employer (if self-insured). A fully insured health plan is subject to the terms and conditions of the insurance policy, so employers with this type of health plan could provide a self-insured rider or adopt a health reimbursement arrangement (HRA) to that policy to pay for travel expenses for women to obtain abortions if abortions are not available in their town of residence.
In general, to qualify as a medical expense:
i. The travel expenses must be essential to the medical care – presumably essential if no legal abortion is available in the taxpayer's geographic area, which is usually 35-50 miles for most IRS purposes; and
ii. Travel expenses must be limited to:
a. Transportation costs. The Code defines transportation expenses to include the cost of traveling by bus, air, taxi and/or train, as well as the cost of gas and oil if driving by car. Additionally, if a guardian, caretaker or medical provider is required to travel with the individual to obtain the medical care, those costs associated with the person accompanying the individual seeking medical care are also considered eligible expenses. Costs of car insurance, car maintenance and/or car repair expenses are not eligible medical expenses. The current mileage reimbursement rate is $0.18/mile (for 2022) for medical expenses. However, the taxpayer can use actual expenses (gas receipts);
b. Lodging of up to $50/night; and
c. Meals only if provided by the medical provider.
4. Are Employers at Risk of Liability for Violation of a State's Aid and Abet Law that Creates Liability for Those That Assist a Woman in Obtaining an Abortion?
At this time, the answer to that question is unknown. This is an issue ripe for debate and litigation. While ERISA's preemption provisions are broad and theoretically should protect the plan and the employer from a state's attempt to impose liability on those who assist a woman in obtaining an abortion, there is no certainty on how such a dispute would be resolved in the courts. Further, there are concerns regarding a state's ability to obtain through subpoena information regarding those obtaining abortions out of state. While group health plans are "covered entities" for purposes of the Privacy Rule under the Health Insurance Portability and Accountability Act of 1996, as amended (HIPAA), employers are not covered entities. Thus, employers would be wise to make certain that they receive no individually identifiable health information about their employees so that they will not have knowledge of which participants are receiving abortion-related benefits under the group health plan.
Obviously, this is an issue that presents a great deal of political debate. Our alert is intended to advise employers on their legal options with respect to their group health plans. These issues will continue to develop for the foreseeable future, and Baker Donelson will provide updates and commentary as appropriate.
Colorado became the first state in the country to have a state-designed health care insurance option for its residents approved by CMS last Thursday.
Approval of the Colorado Option through the federal1332 waiver now means the state can proceed with rate setting for its standardized health insurance plan, which is mandated to be sold at lower prices and should be finalized by summer’s end to take effect in 2023, culminating a decade’s worth of health policy efforts aimed at reducing health care costs.
Get the latest state-specific policy intelligence for the health care sector delivered to your inbox.
Those efforts include the state’s reinsurance program, which was extended for an additional 5 years last year and spreads risk across the health insurance market to help insurers pay expensive claims, and the Hospital Provider Fee that supports hospitals serving Medicaid and uninsured patients.
The Division of Insurance recently finalized its reinsurancepayment parameters for 2023 that aims to maximize rate reductions, increase enrollments, and improve morbidity all while encouraging engagement and competition among carriers and providers in the individual marketplace.
In its most recent legislative session, Colorado enacted 3 pieces of consumer protection legislation, House Bills1284,1285, and1370, all designed to lower health care costs.
HB 1284 requires emergency medical services to be billed at the in-network rate regardless of the facility and guards against unexpected and costly charges. HB1285 prohibits hospitals from pursuing debt collection if federal price transparency standards are not followed, requiring providers to publicly post their standard pricing for various services.
Meanwhile, HB 1370 requires carriers to implement a copayment-only structure for prescription medications in at least a quarter of their health plans.
CMS hailed Colorado as a national leader in health care cost reduction efforts.
“Through thisnew model, Colorado leverages federal savings to expand affordability and coverage in the state like no other state has done before,” said CMS Administrator Chiquita Brooks-LaSure. “The Colorado Option is groundbreaking and a step in the right direction to reduce the uninsured rate, while investing in health insurance coverage affordability and improvements, and advancing health equity. We encourage all states to consider innovative ways to use section 1332 waivers in the future to expand and improve coverage and lower costs for their residents.”
Passed in 2021, the Colorado Option instructed state regulators to write up a “standardized plan”—a consistent package of benefits and cost structures like co-pays—that insurance companies are mandated to sell with premiums 5% below what they were in 2021, after inflation adjustments. That target increases to 15% below by 2025.
Offered only on the individual and small group markets, the plan is designed to save the federal government on its existing insurance premium subsidies by creating what are known as “pass-through” savings that can come back to the state.
The state’s waiver application estimates those savings would amount to $13.3 million in 2023 and $147.9 million by 2027.
The moves come as Coloradans struggle with higher costs of living.
In the current environment of inflation, cost of living has emerged as a “serious” problem according to nearly 90% of those recentlypolled by the Colorado Health Foundation. In its adjacentpoll, two-thirds of Coloradans characterized the cost of health care as a “very serious” problem.
This sentiment was reflected by the Colorado electorate who voted for moderate candidates in Republican primaries, results that reflect broad support for “kitchen table” issues, according to local politics reporter Marianne Goodland.
The percentage of personal consumption expenditures on health care services climbed to 14.9% in 2019 prior to the pandemic.
Source: Colorado Department of Health Care Policy and Finance
The inflationary trends have insurance companies skeptical that reduction targets can be met while being actuarially sound. The Colorado Association of Health Plans stated that the methodology used to calculate inflation, the Consumer Price Index’s medical index, will not reflect the true rise in costs being seen on the ground.
That delay in care along with the persistent workforce shortage have contributed to rising health maintenance costs, according to the Colorado Hospital Association (CHA), as providers struggle to meet the pent-up demands of a growing population.
“Much of the focus of state policy in recent years has been on health care affordability,” said Katherine Mulready, Chief Strategy Officer and Vice President for Legislative Policy at CHA. “The reality is that when supply outstrips demand, prices rise. So this does not portend well for affordability, which in turn, doesn’t portend well for access. We’re talking about both indirect access of costs, but also direct access.
The provider is not there when you need them to be there. There’s not a lot of optimism I can paint in that picture right now other than we’re doing everything we can to stave off [the] continued crisis.”
Providers nationwide are coordinating efforts to reimagine health care where telemedicine is emerging as a solution to meeting demand and improving access.
Mulready said the association is utilizing new tools and roles as a part of that reimagination, such as advocating a policy that would allow greater use of certified registered nurse anesthetists in advanced practices to manage some anesthesiologist services.
“The policy principle that underlies all of our workforce is allowing the market or allowing employers the flexibility they need to continue to deliver high quality and accessible care,” Mulready said. “As long as we can find a professional who has the experience and training to do the tasks that’s being contemplated, we should be able to use them and we shouldn’t see artificial limitations on their scope through their licensing boards or other places. Some of that’s reimbursement policy, some of that’s licensing policy, some of its facility policy, but there’s a lot of work. [CHA is] invested there to try to advance that reimagination of care delivery.”
Gov. Jared Polis has made clear his administration’s goal of lowering health care costs for consumers. In 2020, for instance, Polis vetoed a bill that would have increased coverage for alternative opioid treatments over concerns the measures would increase private insurance costs.
As costs rise and the midterm elections approach, health policy advocates will look to continue striking that balance between holding the line on health insurance prices and adding benefits for Coloradans in next year’s legislature.
Governor Tom Wolf is urging Congress to take action to preserve Affordable Care Act (ACA) subsidies to ensure that individuals and families who were eligible for this important subsidy may continue to obtain health care.
In a joint letter, Gov. Wolf and 13 other governors urged Congress to take action and ensure funding is in place to preserve ACA subsidies known as advanced premium tax credits (APTCs), which were expanded through the American Rescue Plan Act of 2021. The ARPA-expanded subsidy eligibility is set to expire at the end of the current plan year, leaving consumers exposed to dramatic premium increases.
“Tens of thousands of Pennsylvanians will be impacted if this subsidy expansion expires in December, which will mean their insurance premiums will increase, putting individuals in a health and financial risk. It’s critical that we continue to make affordable coverage as accessible as possible to as many as possible, and I applaud President Joe Biden for his leadership to not only expand coverage as part of ARPA, but also to make it permanent,” Gov. Wolf said. “I urge Congress to make these subsidies permanent so that Pennsylvanians can continue to have a better quality of life through affordable comprehensive ACA coverage.”
Governor Wolf has made access to affordable health coverage a priority throughout his administration.
In July 2019, Governor Wolf signed legislation establishing Pennie, the state-based ACA marketplace. Pennie replaces healthcare.gov as Pennsylvania’s official destination for shopping for quality health insurance plans and the only source of financial assistance to help with the cost of coverage and care. Currently there are nearly 360,000 Pennie customers throughout the commonwealth.
In addition to Pennie, Governor Wolf expanded Medicaid in 2015 — one of his first acts as governor — ensuring more Pennsylvanians have access to Medical Assistance in Pennsylvania. Today, more than 3.3 million Pennsylvanians are covered by Medical Assistance including almost 1 million people through the expansion. By expanding access to health care, the commonwealth realized the lowest uninsured rate in Pennsylvania history during the Wolf Administration and insurance rates are now the most stable year over year than they’ve ever been.
View a copy of the letter:
As governors, we are working to expand access to quality, affordable healthcare for the people of our states. Since the beginning of the pandemic, we have seen the tragic impact of disease and illness among the uninsured and underinsured, particularly in communities of color and other underserved populations. As we have experienced during the COVID-19 pandemic, access to affordable health insurance can sometimes mean the difference between life or death. At a time when governments at all levels are struggling to find ways to reduce costs for the American people, we cannot allow the looming specter of rising health costs to cause more uncertainty and stress for American families. Therefore, we urge you to take action and ensure funding is in place to preserve Affordable Care Act (ACA) subsidies known as advanced premium tax credits (APTCs).
We applaud Congress for the passage of the American Rescue Plan Act of 2021 (ARP), which expanded and enhanced ACA APTCs. The ARP’s expansion of subsidies, along with the Biden Administration’s investment in marketing and enrollment support, led to a record high 14.5 million people signing up for ACA coverage during the most recent open enrollment period, a 21 percent increase from the prior year.
Health insurance coverage is critical to ensure consumers have access to healthcare and the best way to increase enrollment is to make coverage more affordable. The ARP has lowered costs for consumers: families saved an average of $200 a month in premiums, with four out of five consumers eligible to obtain a plan for $10 or less. The ARP expanded access to financial assistance and increased the number of consumers eligible for subsidies by 2.8 million in 2022 compared to the prior year.3 With the Biden Administration’s reinvestment in the ACA and the proposed rulemaking to fix the “Family Glitch,” we have a historic opportunity to build upon these enrollment gains and affordability improvements next year and in years to come.
Unfortunately, the ARP-expanded subsidy eligibility is set to expire at the end of the current plan year, leaving consumers exposed to dramatic premium increases, and threatening the progress we have made. As inflation continues to put a strain on consumers’ budgets, we are concerned that many people will choose to reduce health insurance coverage or even go without coverage if Congress fails to act. The Biden Administration estimates that approximately 3.4 million consumers currently enrolled could lose coverage if the ARP subsidy expansions expire at the end of 2022. The expiration of the enhanced subsidies would also lead to a decrease in enrollment and an increase in premiums, destabilizing health insurance markets, and impacting affordability for the broader population. Additionally, as the Public Health Emergency is expected to end in the coming months, some consumers will no longer be eligible for Medicaid but may become eligible for ACA subsidies. Without the enhanced subsidies to ensure there are affordable marketplace options, those consumers are likely to become uninsured.
Healthcare is a right—not a privilege. The ARP greatly improved health insurance affordability to ensure lifesaving healthcare is accessible to all Americans. We urge you to take action immediately to make the ARP expanded subsidies permanent to prevent a disastrous erosion of health insurance coverage.
If you get your health insurance through the government Health Insurance Marketplace, you may want to brace for higher premiums next year.
Unless Congress takes action, enhanced premium subsidies — technically, tax credits — that have been in place for 2021 and 2022 will disappear after this year. The change would affect 13 million of the 14.5 million people who get their health insurance through the federal exchange or their state's marketplace.
"The default is that the expanded subsidies will expire at the end of this year," said Cynthia Cox, a vice president at the Kaiser Family Foundation and director of its Affordable Care Act program. "On average, premiums would go up more than 50%, but for some it will be more."
More from Personal Finance: Cost to finance a new car hits a record $656 per month Some medical debt will soon disappear from credit reports Tying the knot? Add 'marriage tax penalty' to potential cost
Most enrollees — which includes the self-employed and workers with no job-based health insurance — receive subsidies, which reduce what they pay in premiums. Some people also may qualify for help with cost-sharing such as deductibles and copays on certain plans, depending on their income.
Before the temporary changes to the calculation for subsidy eligibility, the aid was generally only available to households with income from 100% to 400% of the poverty level.
The American Rescue Plan Act, which was signed into law in March 2021, removed — for two years — that income cap, and the amount that anyone pays for premiums during the reprieve is limited to 8.5% of their income as calculated by the exchange.
Assuming Congress does not extend the expanded tax credits, only people with household income from 100% to 400% of the federal poverty level will once again qualify for subsidies.
Exactly how much of a premium increase a person would see depends on income, age, the premium cost where they live and how the premiums charged by insurers change for next year, according to Kaiser.
Here's a hypothetical example, based on a report from the Congressional Budget Office: Say a 64-year-old with $58,000 in income — about 430% of the 2022 poverty level of $13,590 — has insurance through the exchange. The 8.5% limit currently in place means they would pay no more than $4,950 for premiums this year. However, if faced with a 400% cap on eligibility in 2023, that same person would pay $12,900 for premiums because they'd no longer qualify for subsidies.
A proposal to extend the extra subsidies through 2025 was included in the Democrats' Build Back Better bill, which cleared the House last year but fell apart in the Senate.
It's uncertain whether the provision will be revived in some form via other legislation that Democrats may try to get through the Senate before a new Congress starts in January — the makeup of which could look very different due to the midterm elections Nov. 8.
Washington, D.C. — Employers in the United States this year will earn an average return on investment (ROI) of 47% from their employer-sponsored health insurance (ESI) programs, according to a new study from Avalere Health. This means for every dollar spent on ESI, employers get back $1.47 in financial benefits. The analysis from the health data firm finds that the average ROI is projected to grow to 52% in 2026, and that businesses that invest more in their ESI programs tend have a higher ROI.
While providing employees high quality health insurance is the right thing to do for workers, the report shows how it makes business sense. Avalere attributes the direct financial return for employers to lower direct medical costs, increased productivity, lower recruitment costs, stronger retention, lower short- and long-term disability costs, as well as tax benefits. More than 155 million Americans currently get their health insurance through ESI.
The study was commissioned by the U.S. Chamber of Commerce on behalf of the Protecting Americans’ Coverage Together (PACT) campaign. PACT members, including the U.S. Chamber of Commerce, Business Roundtable, The National Association of Manufacturers, Council for Affordable Health Coverage, and Vermeer Corporation, represent leading employer voices focused on strengthening the employer-sponsored insurance (ESI) system and protecting the coverage and benefits that American families depend on for their health.
The report from Avalere looks across industries at trends that drive ROI higher and lower. Avalere highlights the manufacturing industry as an example, finding American manufacturers see an ROI of 42% on their ESI programs.
“Employee-sponsored health insurance is a win-win for employers and employees,” said Katie Mahoney, Vice President of Health Policy at the U.S. Chamber of Commerce. “We know employees place a high value on quality health insurance in the workplace, and now we have more evidence that employers benefit significantly from investing in these programs as well. Employer-provided coverage is the backbone of the American health care system, and this report reinforces that any reforms should build off this model that is good for workers and companies alike.”
“Improving productivity and wellness make America more competitive and prosperous,” said Joel White, President of the Council for Affordable Health Coverage. “While employers offer health coverage to improve the health and welfare of their employees, employees and their families benefit significantly. This study shows that Congress and the Administration must work to expand job-based coverage, not weaken it.
“Manufacturers are in the business of innovating and delivering best-in-class products to their customers,” said Robyn Boerstling, Vice President, Infrastructure, Innovation and Human Resources Policy at the National Association of Manufacturers. “That philosophy extends to the benefits provided to their employees, and this report further validates that offering comprehensive and innovative health benefits is not only the right thing to do but also critical to attracting and retaining the best talent. We are proud that approximately 99% of NAM member companies offer health benefits to employees, and working Americans understand the value and competitiveness of employer-sponsored health care.”
“As an employer, knowing who we are caring for and the communities they come from gives us the advantage of providing access to quality, affordable care to our team and their families,” said Vermeer Corporation. “It is an incredibly important part of how we care for our people.”
The study, which examined employers with 100 or more employees, defined ROI as “the monetary value of benefit for each dollar employers invest in healthcare coverage. Investment in ESI may include health insurance premiums, wellness programs, direct medical expenses, administrative costs associated with processing medical claims, and other costs associated with providing health insurance. Avalere calculated the ROI derived from ESI by dividing the total employer benefits by the total costs of providing ESI.”
The full report including methodology can be found here.
Tina Passione needed health insurance in a hurry in December. The newly retired 63-year-old was relocating to suburban Atlanta with her husband to be closer to grandchildren. Their house in Pittsburgh flew off the market, and they had six weeks to move out 40 years of memories.
Passione said she went online to search for the federal health insurance marketplace, clicked on a link, and entered her information. She promptly got multiple calls from insurance brokers and bought a plan for $384 a month. Later, though, when she went to a pharmacy and doctor offices in Georgia, she was told she did not have insurance.
In fact, it said it right on her card: “THIS IS NOT INSURANCE.”
Passione is one of 10 consumers who told KHN that they thought they were buying insurance but learned later that they had been sold a membership to a Houston-based health care sharing ministry called Jericho Share. The ministry formed in 2021 when House of Prayer and Life Inc., a half-century-old Christian congregation, assumed the name Jericho Share, according to Texas business filings.
Health care sharing ministries are faith-based organizations whose members agree to share medical expenses. The ministries grew in popularity before the Affordable Care Act’s mandate for having insurance coverage was repealed because they offered a cheaper alternative to insurance. But they are not insurance, largely not regulated as such, and don’t necessarily cover members’ medical bills. Massachusetts is the lone state that requires ministries to regularly report data, and only about half of claims submitted to ministries there were deemed eligible for payment. This spring, the Colorado legislature passed similar requirements that await the governor’s signature.
The Better Business Bureau gives Jericho Share an F rating, its lowest, and its website shows more than 100 complaints filed in less than a year. Texas Department of Insurance documents show two complaints, from February and March, about Jericho Share. The department responded to both by saying it regulates insurance, which ministries are not, and forwarding them to the state attorney general’s office. The attorney general’s office did not respond to KHN questions about the status of the complaints.
John Oxendine, a lawyer who was elected four times as Georgia’s insurance commissioner, responded to KHN’s inquiries made to Jericho Share. He is currently facing federal charges of conspiracy to commit health care fraud that he said are unrelated to Jericho Share. He denied any wrongdoing. If Jericho memberships are being sold to consumers in misleading ways, “that’s a good way for a broker to get fired,” he said.
“Jericho Share does not tolerate any type of misrepresentation or unethical conduct on the part of its programs,” according to a statement sent through Oxendine. “Whenever we become aware of inappropriate conduct, we take appropriate action to remedy the situation.”
Consumers can always cancel their Jericho Share plans, Oxendine said. Many consumers who spoke to KHN did cancel their plans and receive refunds, but several said the process to do so was frustrating. Some were left to sort out payment for bills they incurred while they thought they were insured. At least seven of the people KHN spoke with said they ended up with Jericho Share after beginning their health insurance searches on Google.
Encountering such issues while shopping for health insurance is not uncommon, said JoAnn Volk, co-director of Georgetown University’s Center on Health Insurance Reforms. She co-authored a 2021 report that found “misleading marketing practices” were directing consumers to alternative health plans, like ministries, that can cost more than marketplace plans and offer fewer protections.
“It’s especially unfortunate because people have set out to buy comprehensive coverage,” Volk said.
Susan Fauman, 47, a metalsmith from Germantown, New York, relied on her spouse’s insurance coverage but wanted her own insurance policy before submitting her divorce paperwork last fall. Fauman said her Google search landed her on a series of what the advertising industry calls “lead-generating” websites: nongovernmental webpages that connect insurance brokers to consumers.
None of the consumers KHN spoke with could say with certainty which site ultimately connected them to the brokers who sold them Jericho Share memberships. ObamacarePlans.com and AffordableHealthPlans.org are among the lead-generating websites that show up on Google when someone searches with terms such as “Obamacare insurance” or “healthcare marketplace.” Those site listings are actually advertisements that resemble ordinary Google search results but are labeled with the word “Ad” and are placed above the most relevant search result: the federal government’s official health insurance marketplace, healthcare.gov.
Google spokesperson Christa Muldoon said companies that advertise on searches related to the Affordable Care Act must prove they are licensed to sell insurance via the federal or state marketplaces.
Those marketplaces let consumers shop for comprehensive health insurance, tell them whether they qualify for financial assistance, and connect consumers with enrollment assistance, if needed. By contrast, lead-generating websites typically just sell the personal information provided by consumers to insurance brokers and agents who can sell other types of plans.
Fauman said she unwittingly put her information into what turned out to be several lead-generating websites. She was soon inundated with phone calls from insurance brokers, she recalled.
Eager to get insurance, Fauman said, she bought a plan for about $330 a month, plus a $99 sign-up fee. She said the broker — who, she later realized, never named the plan — said she’d have basically no copays and no restrictions on where to get care. But he did not tell her it was a health care sharing ministry, she said, or that it wasn’t insurance — something she didn’t know to ask about. When she received her Jericho Share card with its disclaimer, she thought, “What the hell did I sign up for?”
Ministries and aggressive insurance marketing practices have raised eyebrows before, and the Washington state attorney general issued a consumer alert last year about “ads and websites posing as the official health insurance marketplace.” But Georgetown University’s Volk said large-scale crackdowns would likely require cooperation by multiple state regulators because states are the default enforcers of insurance rules. The Federal Trade Commission did bring a case against a Florida-based operation in 2018, alleging it collected over $195 million by enrolling consumers in “worthless plans.” The case is ongoing.
And it’s not always clear who can and should be protecting consumers in this complicated space that covers public and private insurance, interstate commerce, websites, and health care sharing ministries.
The Centers for Medicare & Medicaid Services manages the healthcare.gov website. “When CMS sees an ad we think is misrepresenting HealthCare.gov, we share it immediately with the search engines,” deputy administrator Ellen Montz said in a statement.
Louise Rasho, a spokesperson for MediaAlpha, which operates ObamacarePlans.com, said in an email that the company’s code of conduct does not allow brokers who buy customer leads to mislead consumers. It periodically monitors calls to ensure compliance. She also noted the site has disclaimers saying that it is not a government website.
Craig Sturgill of Excel Impact LLC, which owns AffordableHealthPlans.org, said that if the company learns a broker has broken the law or used questionable tactics, it terminates contracts and takes “further action” as necessary. “As a digital marketing company, we aren’t necessarily in the business of deeply educating consumers from beginning-to-end about all of their available options,” Sturgill said in an email. “Our role is to connect consumers to advisors who can and should effectively educate consumers.”
The broker callback number that consumer Hemani Hughes said she used to correct the spelling of her name on her Jericho Share plan — before she realized it was a ministry — is listed on the websites of the Better Business Bureau and the Utah Insurance Department as belonging to Florida-based Prosperity Health LLC. In an email, Prosperity Health’s registered business agent, Ahmed Shokry, said it had “never sold Health Shares.”
Hughes, a 49-year-old communications strategist in Kansas, said she was sold a Jericho Share plan in February after specifically telling a broker she did not want a health care sharing ministry plan. Hughes said she realized after her call that the broker never mentioned the plan by name, saying only that she was signing up for a “national PPO” and walking her through the copays.
When Hughes realized it was a health care sharing ministry, she said, she called to cancel her plan. She was met with what she described as “a pretty manipulating and very belligerent gantlet of customer service reps and hold times” over multiple calls.
At one point, Hughes said, the people she was speaking with told her it was irresponsible to go without insurance — even though Jericho Share itself is not insurance.
Hughes outlined her story in a complaint she filed with the Better Business Bureau. Jericho Share responded to the consumer watchdog that it was contacting Hughes directly to protect her private health information and said, “We are working very diligently to investigate this complaint thoroughly.” Hughes ultimately received a refund.
Passione said she filed her complaint with the Better Business Bureau after she couldn’t get a straight answer about payment for her doctor appointments and prescriptions. In March, Passione canceled her Jericho Share plan and signed up for COBRA coverage through her former employer for $782 a month.
“A bit expensive, but at least I know what I am getting,” Passione said.
She said she was reimbursed by Jericho Share for one month’s payment and is waiting to hear whether her credit card company can recoup payments she made in January and February.
Fauman, who also filed a complaint, received a refund, too, but spent two months uninsured and avoided calling her doctor while she sorted out the situation.
“I was afraid of what it was going to cost me,” Fauman said.
She eventually got marketplace insurance with the help of a “navigator,” someone trained to help consumers enroll in coverage without earning a commission. After subsidies, Fauman’s premium is around $95 a month, costing her about $2,800 less a year than what she said her Jericho Share plan would have — and her new plan is actually insurance.
Where to Buy Marketplace Insurance To find a health insurance plan, visit the federal marketplace, healthcare.gov, or call 800-318-2596.
[Update: This article was revised at 11:15 a.m. ET on June 8, 2022, to report lawyer John Oxendine’s unrelated indictment charges.]
There's a chance your health insurance company owes you some cash.
Depending on how you get your coverage, you may be one of the 8.2 million policyholders expected to get a piece of $1 billion in premium rebates this fall from various insurers, according to a preliminary analysis from the Kaiser Family Foundation.
The amount is down from $2 billion issued in 2021 and a record $2.5 billion in 2020.
"In the last couple of years we've seen some really large rebates — twice the size of this year's amount," said Cynthia Cox, a vice president at the foundation and director of its Affordable Care Act program. "But I'd say $1 billion is still significant."
More from Personal Finance: IRS working to boost audit rates for higher earners The U.S. job market is still hot — at least for now How to pay for college after a financial setback
Generally, you're more likely to see a rebate if you have an individual policy (including through a state health exchange or the federal one) or participate in a small- or large-group plan. (Many of the biggest U.S. employers choose to self-insure, which means their plans don't have to adhere to certain requirements placed on insurance companies. Different rules also apply to Medicare and Medicaid coverage.)
So why are the rebates going out?
Basically, insurance companies that sell group or individual policies must adhere to a "medical loss ratio" requiring them to spend at least 80% of premiums paid by enrollees on health-care costs and certain other expenses related to patient health. (For large group plans, the ratio is 85/15.) If that threshold is not met, enrollees are reimbursed the difference.
Each year, the ratio is calculated based on a rolling three-year average. So the rebates this year derive from insurance companies' financial data from 2019, 2020 and 2021.
This year's refunds — which will go to eligible participants enrolled last year — work out to about $141 per plan participant in the individual market, $155 in the small group market and $78 in large group plans, according to the Kaiser analysis. However, that amount can vary widely, depending on your location and insurer.
Insurers typically either send a check to policyholders or deduct the rebate from premiums (and send a check to individuals no longer enrolled but owed some money). Be aware that if you are in a group plan, your employer may split the rebate with you, Cox said.
If you're entitled to a rebate, you should receive it by Sept. 30.
WASHINGTON, June 22, 2022 /PRNewswire/ -- The American Academy of Actuaries has released a public policy issue brief that points to the possible expiration of two signature pandemic-era measures that boosted health insurance affordability and coverage as among the drivers of potential premium changes for individual and small group plans in 2023.
"Proposed health insurance premium rates reflect many factors, which can include the effects of legislative and regulatory changes," said Academy Senior Health Fellow Cori Uccello. "This is especially true for 2023 rates, due to the possible expiration later this year of enhanced Affordable Care Act (ACA) premium subsidies and of a key support of Medicaid coverage during the pandemic."
The issue brief, developed by the Academy's Individual and Small Group Markets Committee, Drivers of 2023 Health Insurance Premium Changes, discusses these key factors and others that may account for differences in premium rates being filed with state insurance departments this year for 2023, compared to 2022 rates. The factors are illustrated in a new infographic as well.
The American Rescue Plan Act of 2021 (ARPA) increased advanced ACA premium tax credits in 2020 and 2021 for all eligible income brackets, including extending tax credits to those who earn over 400% of the federal poverty level. These subsidies, which make plans more affordable, are set to end with the expiration of ARPA on Jan. 1, 2023, reversing enrollment gains and possibly worsening plan risk pools.
Provisions in the Families First Coronavirus Response Act (FFCRA) increased federal fiscal aid to states for covering Medicaid enrollees during the pandemic-related Public Health Emergency (PHE), contingent on the states suspending their usual processes for redetermining eligibility for Medicaid coverage. These provisions are set to expire at the end of the quarter in which the PHE is not renewed, which could happen this year. In that event, states could restart the usual redetermination process, meaning some individuals who received Medicaid coverage during the pandemic could no longer be eligible for Medicaid and shift to the individual market, the employer group markets, or become uninsured—a shift that could affect risk pools in the individual and small groups markets.
Other factors expected to drive premium rate changes for 2023 include changes to the composition of the small group market due to the continued shift of small employers to self-funded, level-funded, or other risk-rated coverage, or otherwise leaving the market; changes in utilization patterns for telehealth visits and for mental health care; and changes in provider contracting including the expected impacts of medical inflation. The costs of preventing, testing for, and treating COVID-19, while expected to stabilize, could also be important factors for certain health insurance plans, depending on projected trends in the pandemic, particularly should a new variant emerge that is not mitigated by the immunity provided by prior infections or vaccinations. State-level measures such as reinsurance programs aimed at lowering premiums could also reduce premiums, with an outsized reduction in the first year of new reinsurance programs.
The American Academy of Actuaries is a 19,500+ member professional association whose mission is to serve the public and the U.S. actuarial profession. For more than 50 years, the Academy has assisted public policymakers on all levels by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets qualification, practice, and professionalism standards for actuaries in the United States.