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By Jack Crowe
North Carolina’s largest health care provider is raising premiums by nearly 23 percent for Obamacare plans in 2018.
Blue Cross Blue Shield announced the premium hike Thursday on the heels of a 24.3 percent premium increase this year and a 32.5 percent increase in 2016. Blue Cross’ Obamacare premiums have more than doubled since the passage of Obamacare made health insurance mandatory for most Americans in 2014.
The 22.9 percent premium increase request, filed with the N.C. Department of Insurance on Thursday, is a statewide average for 18 plans in 16 rating areas, with specific increases ranging from 7.6 percent to 31.6 percent.
Blue Cross attributed these increases to uncertainty around whether the Trump administration will continue funding cost sharing reduction subsidies in 2018. Cost sharing reductions offer additional subsidies on deductibles and other out-of-pocket expenses to any individual or family who’s income is between 100 percent and 250 percent of the federal poverty line.
A family of four earning $40,000 would save about $2,800 a year on deductibles with the reductions, Blue Cross said. The Republicans sued to halt the payment of cost sharing reductions and the Trump administration asked the Federal Court of Appeals to delay its ruling for 90 days. This has led to increased uncertainty for health care providers who are filing for 2018 premium increases and need to know if they can count on a check from the federal government.
Blue Cross, the only provider offering Obamacare policies in 95 out of 100 North Carolina counties, insures 502,000 people through the federal exchange, 94 percent of whom qualify for federal subsidies. Blue Cross said the rate increase would only be 8.8 percent if Congress continues to fully fund Obamacare subsidies in 2018. (Related: The Potentially ‘Unconstitutional’ Obamacare Feature Everyone Is Ignoring)
Significant premium increases have been commonplace across the country. Some of the most extreme cases include 52 percent in Maryland by CareFirst and 38 percent in Virginia by Anthem, according to The Washington Post. Cigna, the only other provider offering Obamacare policies in the state, confines its coverage to five counties in the Raleigh area. Cigna made an even more dramatic rate increase request of 31.9 percent in 2018 on Thursday.
Brian Tajlili, Blue Cross’s director of actuarial and pricing services, explained in a conference call with reporters that premiums keep increasing, in part because those signing up for the federally subsidized coverage are older and sicker than the general population. Insurers are concerned this problem will become worse if the individual mandate which compels individuals to buy coverage by threat of fine is not effectively enforced next year.
The American Healthcare Act eliminates the individual mandate but Republicans hope to offset the associated cost increase by requiring individuals to maintain continuous coverage. In the event that an individual allows their insurance to lapse they would be forced to pay a 30 percent surcharge on their monthly premiums for one year after they regain coverage. The measure is intended to incentivize younger people to maintain coverage, and to prevent people from buying insurance only after getting sick.
Average premiums doubled for individually purchased coverage since Obamacare took effect, according to a report released Wednesday by the Trump administration. Premiums in the 39 states that participate in the online federally run insurance marketplace have increased from an average of $224 a month in 2013 to $476 in 2017, the report from the U.S. Health and Human Services Department said.