State seeks delay on rate approval for exchanges

Ralph Hudgens
Ralph Hudgens

Georgia’s insurance commissioner has asked for an “emergency delay’’ of a deadline for approving proposed premiums in the state exchange set to roll out under the health reform law.

The commissioner, Ralph Hudgens, cited ‘‘massive rate increases’’ in the insurers’ proposals in his explanation for his request.

The deadline for state regulators to approve the insurance rates for the exchanges is Wednesday. Hudgens told GHN on Tuesday that Georgia is the only state that has asked for a 30-day extension to continue to analyze the rate increases.

“I was always skeptical of Obamacare,” said Hudgens, a Republican who, like many political leaders in his party, opposed the Affordable Care Act. “But I never imagined that it would lead to rates being doubled or tripled.”

Nearly everyone with an individual policy will see their premiums rise, he said.

The increases are up to 198 percent for individuals, Hudgens said in a statement Tuesday. “Increases of this magnitude will make coverage less affordable and increase the number of uninsured in Georgia.”

Consumer advocates, though, pointed out that under the ACA, many individuals will have a subsidy to help offset the cost of a premium.

In addition, the current system locks out people with pre-existing health conditions, said Cindy Zeldin of the group Georgians for a Healthy Future, which strongly supports the ACA.

The current average rate for an individual policy “is only average for people whom the insurance industry wanted to cover,’’ Zeldin said. With the health law, she said, “many more people will gain coverage.’’

Hudgens told GHN that his agency had four independent actuaries review the rates submitted for the health insurance exchange in Georgia, which will be run by the federal government.

Six of the seven health insurers had “reasonable’’ rates, but one company submitted premiums that were 11 percent too high, Hudgens said. He did not identify the company with the highest rates.

Hudgens said he is asking U.S. Health and Human Services Secretary Kathleen Sebelius to review the Georgia premiums as well. Hudgens asked that HHS respond to his request for an extension by close of business Tuesday.

An HHS spokesperson told GHN by email late Tuesday that “we are working closely with states to help them meet all deadlines and ensure that the marketplaces are ready for consumers to begin shopping on October 1. We have received Georgia’s request and are reviewing it.”

Nationally, premiums in the health exchanges have been reported higher than current rates in some states but lower in others. The insurance commissioner in Florida said the individual market will see rate increases of 30 percent to 40 percent for next year.

New York state recently announced insurance premiums would drop 50 percent next year for individuals buying their own coverage in the new online marketplaces. But that’s because New York already bars insurers from rejecting people with health problems — a rule that the ACA will be instituting nationwide.

In Maryland, meanwhile, the insurance commissioner reduced the premium rates proposed by every insurance carrier in the individual market, some by more than 50 percent, according to an analysis by Maryland officials who will be operating the marketplace.

Zeldin urged Hudgens and his staff to follow Maryland’s lead and work to lower the proposed premiums.

The preliminary filings of exchange rates in May showed that companies are offering rates comparable to or even below current employer premiums, said Bill Custer, a health insurance expert at Georgia State University, who was asked to evaluate the filings for GHN.

Custer compared the filings to large employers’ average premiums, which include unhealthy as well as healthy workers, and whose coverage is comparable to that in an exchange.

Graham Thompson, executive director of the Georgia Association of Health Plans, an industry group, said Tuesday that a majority of people are going to see their premiums increase because of the changes under the Affordable Care Act.

The more robust coverage requirements under the reform law “come with higher costs,’’ he said.

“There will be extremes at both ends of the spectrum,’’ Thompson said. “Young, healthy people will see more rate shock,’’ while older people who are unhealthy will see decreases.

But the 198 percent increase, Thompson added, “is an extreme case.’’

Hudgens also said the benefits required under the exchange, or marketplace, are more sweeping than under the present system. “They’re saying that the only thing available is a Cadillac, not a stripped-down Chevrolet,’’ he said.

Young people under 35 will see increases of more than 100 percent, Hudgens said. Middle-aged people will see hikes of up to 100 percent, and older residents will face increases of up to 40 percent, he said.

He predicted that many young people will skip the required coverage and instead pay the penalty for not having it, which is $95 or 1 percent of household income, whichever is greater.