Nearly 11 percent of those now insured on Maine’s ACA market will drop out, forcing insurers to raise rates, Anthem predicts.

Anthem Blue Cross and Blue Shield is predicting that thousands fewer people will be covered in Maine’s Affordable Care Act insurance market next year, in part because of Trump administration policies.

The insurer is forecasting a nearly 11 percent decrease in the number of Mainers in the ACA marketplace, according to filings with the Maine Bureau of Insurance. The remaining ACA enrollees will be older and sicker, requiring insurance companies to raise premiums, according to Anthem.

About 80,000 Mainers have insurance through the ACA individual market, where people can buy subsidized insurance policies.

The insurance company says part of the reason for the expected contraction is Trump administration policies regarding the ACA, and Congress’ attempt to repeal and replace the Affordable Care Act. The Senate announced its ACA replacement bill on Thursday, but there’s much uncertainty on what, if anything, will be approved by Congress.

“While the ACA marketplace in Maine was becoming somewhat more predictable, recent activity at the federal level has returned the ACA to almost unprecedented levels of uncertainty,” said Anthem’s June 15 filing, noting the insurer could potentially exit the market because of the continued questions surrounding the ACA.

Insurers have filed proposed rate increases, and now must justify the rate hikes to state officials. The regulatory process will continue this summer and into early fall at the same time Congress is debating potential ACA replacement bills.

The three insurance companies in the Maine marketplace – Anthem, Community Health Options and Harvard Pilgrim – have all proposed double-digit increases for 2018. Community Health Options is seeking a 19.6 percent average rate increase for 2018, while Harvard Pilgrim is requesting a 39.7 percent increase, and Anthem’s proposal is 21.2 percent.

Those earning up to 400 percent of the federal poverty level, about $50,000 for an individual, are mostly shielded from the premium increases, while those earning more than that would have to pay the full amount of premium increases. Policyholders who don’t qualify for subsidies pay hundreds more per month for the same insurance policy as those who meet the income guidelines. About 85 percent of all ACA enrollees qualify for subsidies.

‘A STATE OF FLUX’

Anthem pointed out that the Trump administration’s decision to weaken enforcement of the individual mandate – which requires that everyone have essential minimum coverage or face a tax penalty – will encourage healthy people to drop coverage. That, in turn, will result in the remaining pool of people with individual insurance being older, sicker and more expensive to cover.

In January, President Trump signed an executive order that gave federal health authorities discretion to roll back certain parts of the ACA. His staff suggested the order would allow the administration to get rid of the penalty almost immediately, but the Internal Revenue Service has continued to enforce it.

Elimination of the individual mandate has been a cornerstone in the Republicans’ efforts to repeal the ACA.

“We anticipate that ACA enrollment will continue to decline into 2018 given general concerns about the sustainability of the ACA marketplace into 2018 as well as a widening gap between premiums and the penalty for not complying with the mandate,” Anthem said. “When faced with this gap people with relatively low morbidity are more likely to forgo insurance, leaving only those with higher morbidity in the insured block. As premiums continue to rise to cover this increasing morbidity, more lower-cost people discontinue coverage, resulting in higher premiums for those who retain coverage.”

Colin Manning, an Anthem spokesman, said that depending on what happens with health care in the coming months, Anthem may have to make further changes, including exiting the Maine marketplace.

“Without certainty of funding before final decisions need to be made for 2018, Anthem Blue Cross and Blue Shield will need to evaluate appropriate adjustments to our filings such as reducing service area participation, requesting additional rate increases, eliminating certain product offerings or no longer offering on-exchange products in Maine,” Manning said.

Officials with Community Health Options couldn’t be reached for comment Friday, but have previously told the Portland Press Herald that the Trump administration’s lax enforcement of the individual mandate was a major driving force behind the premium increases.

Mitchell Stein, a Cumberland-based independent health policy consultant, said insurance companies must account for many scenarios when setting rates, and the uncertainty leads to higher rates as insurers hedge their bets.

“Insurance companies can deal with any situation as long as they know what the ground rules are,” Stein said. “When the ground rules are in a state of flux, as they are right now, that can cause problems.”

Stein said the Trump administration’s “actions amount to sabotaging the existing law.”

He said undermining the ACA will not save the federal government money, and may instead be more expensive, because the federal government is still on the hook to pay the subsidies. When premiums increase, the government must make up the difference by paying out more in subsidies.

That’s why the Trump administration’s hedging on whether it will pay insurers the cost-sharing subsidies for those who earn up to 250 percent of the federal poverty level will not save money, Stein said. The cost-sharing subsidies further reduce out-of-pocket costs for low-income enrollees. Insurers will react to cutting of cost-sharing subsidies by hiking premiums more, which will increase the federal government’s costs to operate the ACA, Stein said.

Stein said that while the Trump administration can sabotage parts of the ACA, he believes the ACA will not collapse unless Congress repeals the law. That’s because the law mandates that the subsidies be paid, and anyone who qualifies for the subsidies will still be able to buy relatively affordable insurance, Stein said.

“I don’t believe you will see a classic death spiral,” Stein said. “There will still be people buying insurance on the marketplace.”

Joe Lawlor can be contacted at 791-6376 or at:

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