Insurance rates for small businesses going up – but not as much as they could have, DOBI says

Small employers will see an average of 5 percent increases in health insurance this year on the state’s health exchange, according to the state Department of Banking and Insurance.

In one case, the rate actually went down as Oscar reported rates decreasing by more than 3 percent for small employers.

The other insurers are increasing rates.

AmeriHealth had the highest increases, at about 8 percent, while Horizon plans would increase by about 6 percent, and UnitedHealthcare Oxford plans would increase by 3 percent.

A similar trend was seen in the individual market, where, DOBI said, the increase could have been higher.

The department published premium rate filings from insurers last week, indicating that recent state laws which mimic some of the threatened or repealed Affordable Care Act protections for 2019 have helped keep the increases low for the state.

The individual mandate, which has been repealed at the federal level, was enacted at the state level and kept insurers from increase rates by double digits.

Rather than an average of 5.8 percent increase in the individual market, carriers told DOBI they could have increased by as much as 12.6 percent.

Department of Banking and Insurance Commissioner Marlene Caride said the rates reflect an effort by the state to keep the cost of insurance down.

“New Jersey is working aggressively to ensure that residents have access to affordable quality coverage, and actions taken by the state to improve the market are reflected in the rates submitted,” she said.

“Under the leadership of Gov. (Phil) Murphy, New Jersey is leading the nation in its efforts to create stability in the market and to combat the uncertainty created by Washington. Carriers were clear that without state action, the average increase requested in the individual market would have more than doubled.

“We are pleased that the initial rate filings demonstrate concrete results from state efforts. The department is now undertaking its review process to determine if all rates submitted for the individual and small employer markets are justified and comply with the law.”

It’s something Katherine Hempstead, a senior adviser at the Robert Wood Johnson Foundation, is watching closely.

She recently launched an insurance tracker for rates filed by different states.

Prior to DOBI’s statement last week, Hempstead already lauded New Jersey’s efforts to keep the ACA infrastructure alive.

Hempstead said New Jersey has been a strong market for the ACA, proven by the fact that last year it was only one of two states — the other being Alabama — where a new insurer came to the state rather than exited.

The state has also applied for reinstating a reinsurance program, with the help of federal funding, that will further decrease 2019 premiums if it is approved.

“It’s possible that, at least in some markets, the marketplace population has become less costly to serve over time,” Hempstead wrote on the launch of the tool. “It may be that the market is reaching the end of a multiyear ‘Goldilocks Process,’ characterized by initially too many market participants, then too few, now perhaps closer to an amount that is ‘just right,’ although this remains to be seen.”

The tool will monitor AmeriHealth and Horizon Blue Cross Blue Shield — the only two insurers to be in all 21 counties — as well as Cigna, Oscar and Oxford for their premium costs on the market.

Oscar re-entered this year after leaving in 2017, the same year that a co-op, Health Republic Insurance of New Jersey, was liquidated.

The co-op’s executives said the four-year-old company folded over its obligation for risk-adjustment payments — which are from insurers redistributed to insurers based on who incurs a greater number of high-risk members that year.

These payments, which help balance the risk insurers face in taking on new enrollees from the marketplace, are affecting insurers again this year.

DOBI anticipates a 15 percent reduction in rates if the reinsurance program is approved. Insurers will have an opportunity to finalize their rates in the fall.