Fear of ACA subsidy cuts spurs hike in 2018 health insurance rates

Medical and health insurance claim form with stethoscope on clipboard

The state Department of Banking and Insurance released the 2018 premium rates for health insurance plans in New Jersey.

Insurers have previously said the latest, anticipated, move by the Trump administration to defund subsidies to insurers for Affordable Care Act silver plans has caused a significant increase in the premium rates.

Horizon Blue Cross Blue Shield of New Jersey, the state’s largest health insurer, said in a statement Tuesday the delta — or difference in numbers — between a normal increase from last year, compared to the actual increases from the unfunded subsidies, was about 15 percent.

The insurer said it built its prices based on three factors: weakened enforcement of the individual mandate bumping up rates by 8.5 percent; elimination of federal funding for cost sharing reductions (subsidies) adding 3.9 percent; and 2018 reinstatement of the health insurance tax, sometimes called the Cadillac Tax, on high-rate plans adding 2.3 percent.

The total range of premium rate increases for Horizon was 16 to 28 percent on all plans, the insurer said in a statement, adding that 76 percent of all individual enrollees receive premium tax credits.

“Horizon is pricing its individual market products to break even in 2018. The company also filed rates that averaged an 8.8 percent increase for small group market policies, which are not impacted by the individual mandate or elimination of CSR funding,” Horizon said.

Oscar Health, which is returning to the state in the individual market, and expanding into small group for 2018, has prices in the same range as AmeriHealth New Jersey and Horizon.

“Today’s announcement confirms that Oscar plans are among the most affordable options New Jerseyans can choose for their individual and small business group health coverage next year. Oscar is extremely excited to return to New Jersey and deliver an easy, seamless health care experience with access to high quality hospitals for our members,” said Louis DeStefano, vice president of sales at Oscar Health.

UnitedHealthcare Oxford plans are priced the highest of all insurers, at more than $700 per month for all metallic levels.

By comparison, most insurers are near half that rate for bronze (typically high-deductible plans) and silver plans:

  • AmeriHealth: $252 (Advantage), $267 (Tier 1 Advantage);
  • Horizon: $298 (OMNIA), $376 (Advantage EPO);
  • Oscar: $267;
  • UnitedHealthcare Oxford: $709

For Silver plans — the most popular plans on the ACA, and the level of plans AmeriHealth recently got an infusion of — all insurers have at least one plan within the $300 to $500 range, with the exception of Oxford, which, again, has prices in the $700s at $770 and $796.

The popularity of plans is also reflected in this year’s offerings.

Only half the number of bronze and gold plans available last year are available this year.

“The individual market has always been volatile, and it has been especially so as of late. We have seen competitors come and go, healthier members dropping coverage and more high-cost members driving higher utilization of services,” said David Huber, Horizon’s senior vice president and chief financial officer. “The federal government’s actions will drive costs higher and create additional uncertainty, making a volatile situation even worse. If cost sharing subsidies are not funded, rates will increase further. Horizon remains true to our mission in 2018 by offering several plans, including our popular OMNIA Health Plans, to individuals and small businesses in every one of New Jersey’s ZIP codes.

“Horizon is doing everything possible to provide high quality and affordable health care throughout the state.  Our hope is that federal policymakers will wake up and take actions to contain costs, promote stability and encourage more people to obtain health insurance.”