Anthem Blue Cross and Blue Shield on Tuesday defended its request for a 21.2 percent average premium increase on Affordable Care Act individual health insurance plans in 2018, citing heightened risks from political volatility and a higher percentage of unhealthy policyholders.

Tuesday’s rate hearing before the seven-member Bureau of Insurance panel led by state Superintendent Eric Cioppa came at a time when the ACA’s future remains uncertain. A Republican plan to repeal the 2010 law without immediately replacing it appeared to be facing insurmountable opposition Tuesday in the Senate, while President Trump told a group of reporters that his party should “let Obamacare fail,” referring to the ACA by its nickname.

All three of Maine’s ACA insurers are requesting double-digit rate increases for 2018. Maine Community Health Options has a hearing scheduled for Monday on its request for a 19.6 percent rate increase, and the hearing on Harvard Pilgrim Health Care’s 39.7 percent rate increase request is scheduled for Tuesday.

In addition to the Bureau of Insurance panel, made up of state employees and a contractor with insurance expertise, two state assistant attorneys general represented consumers’ interests in the proceedings, and three Anthem actuaries and an attorney spoke on the company’s behalf.

Anthem, which has about 28,700 ACA policyholders in Maine, repeated to the panel its prediction that thousands of Mainers will drop out of the ACA-compliant insurance market in 2018. The remaining pool is likely to include those with more serious health issues, making them more expensive on average to insure, company representatives said.

“Anthem is expecting a smaller, sicker market in 2018,” actuary Dee Clamp told the panel.

THE IMPACT OF RISING PREMIUMS

Most Mainers with ACA-compliant individual plans would not be affected by the rate increases because of federal subsidies, although they are being challenged by Republicans in Congress. But one Anthem policyholder whose family is not eligible for subsidies told the panel that the constant annual increases have been devastating.

Belgrade resident Susan Kinney, who has two daughters with autoimmune diseases, said the premium and deductible costs of her family’s policy are likely to approach $29,000 this year even if her family only seeks treatment within Anthem’s network.

“If we have the unfortunate luck of needing a hospital or doctor who is out of network, our deductible could reach an additional $42,900,” Kinney said. “Please take a moment to think about these numbers. Our medical expenses this year alone could reach $71,721.80.”

Kinney, whose family runs a small logging business, said the continual rise in premiums and deductibles has put them in a “never-ending cycle of medical bills.” She said the ACA should provide additional support for small businesses.

Steve Butterfield, policy director of Consumers for Affordable Health Care, asked the panel to scrutinize Anthem’s rate request to make sure the proposed increase is justified, and to consider its impact on consumers.

“Finally, we encourage the bureau to require Anthem to provide information on what quality improvement or cost-containment measures it is undertaking on behalf of its members, and what the results have been of any such efforts already in progress,” Butterfield said in a written statement. “If Anthem cannot demonstrate sufficient impact from existing efforts (or cannot demonstrate that any exist), the bureau should encourage Anthem to pursue such efforts rather than passing cost increases onto consumers in the form of new premiums.”

GREATER RISK OF INSURERS’ LOSSES

Clamp said Anthem has an entire business unit devoted to finding ways to improve quality and control costs. However, he said individual insurance plans in Maine have never generated a profit for the company, and that all signs are pointing to an even greater risk of financial losses in 2018.

“Risk is increasing significantly in this marketplace,” he said. “The market’s just getting riskier and riskier.”

Another major risk discussed at the hearing is the possibility that the federal government will stop providing cost-sharing reduction subsidies to insurers in 2018. In the past, federal subsidies based on income largely have offset increases in out-of-pocket costs for low- to moderate-income policyholders, but Republican efforts to replace the ACA have created uncertainty about the future of those subsidies.

Insurers believe that the loss of subsidies, coupled with relaxed enforcement of the ACA’s individual mandate requiring Americans to have health insurance, would prompt many current ACA policyholders to opt out in 2018, particularly those who are younger and healthier. Recognizing that possibility, the bureau asked each of Maine’s three ACA insurers in May to also provide an “alternative” rate request that would apply only if the subsidies disappear.

Anthem’s alternative plan would be to exit the ACA marketplace entirely in Maine, although it still would offer new individual plans and policy renewals outside the marketplace with no subsidies.

At the conclusion of the three-hour hearing, Superintendent Cioppa set an Aug. 2 deadline for closing statements and written comments from the public on Anthem’s request. He is expected to rule on the request by mid-August.

J. Craig Anderson can be contacted at 791-6390 or at:

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