Insurers gain agency's OK for rate rises in state

State Insurance Commissioner Allen Kerr is shown in this file photo.
State Insurance Commissioner Allen Kerr is shown in this file photo.

Insurance Commissioner Allen Kerr has approved rate increases averaging just over 2% for the plans that will be sold in Arkansas next year on healthcare.gov, a spokesman for the state Insurance Department said Wednesday.

The increases are the same ones that the insurance companies proposed this summer and that the department announced in July, department spokesman Ryan James said.

They include an average increase of about 2.9% for Arkansas Blue Cross and Blue Shield plans covering more than 166,000 people and 1.9% for Centene plans, sold under the brand name Ambetter by Arkansas Health and Wellness, covering almost 68,000 people.

The rates for plans offered by Little Rock's QualChoice Health Insurance, which was bought by St. Louis-based Centene earlier this year, will increase by less than 0.6%. That includes increases of 0.51% for one set of plans covering 18,401 people and 0.56% for another set covering 18,935 people.

Kerr approved the proposed increases last week, James said. The state was then required to give the federal Centers for Medicare and Medicaid Services five business days before announcing them publicly, he said.

Most people covered by the plans are low-income Arkansans whose premiums are paid with federal and state Medicaid funds under the Arkansas Works program.

The premiums for the 205,563 Arkansans covered under those Medicaid plans averaged $445.71 last month. The Medicaid program also paid subsidies averaging $163.16 per enrollee to reduce or eliminate recipients' out-of-pocket expenses for medical care.

The premiums next year for a 40-year-old nonsmoker who doesn't qualify for Medicaid will range from $319 for an Arkansas Blue Cross and Blue Shield "bronze" plan, designed to cover about 60% of enrollees' medical expenses, to $493 for the company's "gold" plan, designed to cover 80% of such expenses.

Under the 2010 Patient Protection and Affordable Care Act, federal tax credit subsidies are available to help pay the premiums for enrollees with incomes below 400% of the federal poverty level who don't qualify for Medicaid or other coverage from the government or their employers.

That income cutoff in 2019 is $49,960 a year for an individual or $103,000 for a family of four.

An annual open-enrollment period for coverage under those plans starts Nov. 1 and runs through Dec. 15.

The rate increase will be Arkansas' second-lowest since subsidized coverage under the Affordable Care Act first became available in 2014.

The smallest increase was in 2015, when rates for exchange plans decreased an average of 2.2% compared with a year earlier.

For this year, rates increased an average of less than 5% compared with 2018.

The Insurance Department has noted that the rate filings submitted by each of the insurance companies this year cited the planned elimination of a fee that had supported the Arkansas Health Insurance Marketplace, a state agency that was absorbed by the department as a result of a law passed during this year's legislative session.

This year, the fee is equal to 1.25% of the premiums for non-Medicaid plans sold on the exchange through healthcare.gov.

The Insurance Department began collecting the fee after it took over the marketplace's duties, including educating consumers and certifying exchange plans, but it will stop collecting it next year, Kerr has said.

Kerr has said the department will use the $4.3 million it expects to collect through the end of this year to cover the cost of handling responsibilities related to the exchange for at least the next eight years.

Insurance companies also pay the federal government a fee equal to 3% of the premiums for non-Medicaid plans sold through healthcare.gov, to support the website's operations. That fee is expected to drop to 2.5% next year.

A Section on 09/26/2019

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