BY DAVID BOTTOMS, REBC, RHU, CLU, CHFC
SENIOR VICE PRESIDENT, BENEFITS
In the insurance industry it is often said that “in the absence of information, an underwriter’s mind is filled with negative thought.” As we approach 2018, there is a lot of very negative thought swirling in the minds of health insurance underwriters in light of the continuing uncertainty generated by Congress’ inability to coalesce around any seemingly workable solution on healthcare.
For several months, clarion calls have gone out from industry observers regarding the importance of swift action by Congress to stabilize the insurance markets, particularly the individual health insurance segment.
Now, with insurance carrier filing deadlines having come and gone with no clarity out of Washington D.C., the cost of inaction is becoming known as Georgia’s four remaining individual health insurance underwriters have filed 2018 premium increase requests with Georgia Insurance Commissioner Ralph Hudgens ranging from a low of 12.4% from Ambetter Peach State Insurance to a high of 40.6% from Blue Cross Blue Shield. Alliant Health Plans and Kaiser Permanente round out the middle of the pack with 18.6% and 25% increases, respectively.
While news of such large increases in premiums may strike you as exceedingly bad news if you are unfortunate enough to have to purchase individual health coverage, Georgia is actually fortunate to even have four providers in the market.
Although dozens of Georgia counties will join the more than 1,200 counties in the United States projected to have only one insurance provider option, as long as Blue Cross Blue Shield stays in the market, Georgia will at least have one coverage option in every county.
While it admittedly seems odd to propose that having only one provider is cause for thanksgiving, 47 counties in the United States as of now have no carriers committed to offer individual health insurance coverage in 2018.
In the event that Congress elects to take action on healthcare in the coming weeks or months, it is now unlikely that any such action will yield meaningful results for 2018. As a result, it will be up to Insurance Commissioners in various states to try to convince insurance carriers reticent to participate in the markets to pony up for another year and/or to soften their proposed rate increases.
While rate increases make for bad headlines, the increasing number of counties with no coverage options make for even worse headlines.
As such, don’t expect to see a lot of pressure from Insurance Commissioners to push rates down as they will be sighing a breath of relief to even have carriers willing to offer coverage. Regardless, carrier defection from key insurance markets will continue to accelerate so expect to see action out of Congress in the coming months, one way or the other.
The Republican caucus will have to decide if they would like to move forward with their current proposed plan to scale back the current structure known as “Obamacare.” If the Republican majorities in the House and the Senate cannot agree to an approach, expect to see a more liberal leaning solution emerge as the Republican leadership writes off the more conservative holdouts to the legislation and has to move to the left to get something passed.
In any event, absent a solution that generates insurance carrier interest in continued participation in the individual markets, we will find ourselves with even less carriers with even higher prices in 2019.
If there is a silver lining in all of this it would be for all of you who have access to employer provided group health insurance.
While your rates are still rising, the group insurance market is, by comparison, very healthy compared to the individual market case in point being that carriers such as Humana, UnitedHealthcare, Aetna and Cigna have chosen to place their bets there while Blue Cross Blue Shield and Kaiser absorb body blows in the individual market.
So, if you are fortunate enough to have access to employer provided coverage, keep this article in mind when it comes time for your benefits open enrollment and you hear that your premiums are going up a little. Even though your coverage will cost more than you would like, it might make you feel better to recall that your brethren stuck in the individual market would love to have access to the coverage you are being offered.