State grudgingly OKs insurance rates for exchange

Ralph Hudgens
Ralph Hudgens

Insurance Commissioner Ralph Hudgens said Thursday that federal officials did not respond to his request for an extension in the deadline for approving rates in the upcoming state insurance exchange.

Wednesday was the deadline. Because he didn’t get a response in his request for more time, Hudgens said, he was left “with no viable option’’ but to approve the premiums submitted by health insurers.

Hudgens said the insurer filings contain “massive rate hikes.’’

The exchange, also known as a marketplace, will begin enrolling consumers Oct. 1 as part of the health reform law.

Georgia was the only state that asked for a 30-day extension to continue to analyze the rate increases. Hudgens said he wanted Health and Human Services Secretary Kathleen Sebelius to review the Georgia premiums as well.

“Although not surprised, I am disappointed in the unresponsiveness of the Obama administration,’’ Hudgens said in a statement. “Obamacare will inflict substantially higher health insurance costs on Georgia consumers.’’

But a consumer advocacy group said Hudgens was making an “apples to oranges’’ comparison on the affordability of insurance.

Cindy Zeldin of the group Georgians for a Healthy Future told GHN on Thursday that the current insurance rates in the state don’t reflect coverage for unhealthy people, who are now denied insurance or are given prices that are unaffordable.

Those currently insured on the individual market, she said, “are only the ones the insurance companies want to cover.’’

The exchange rates also don’t reflect the subsidies that many people will receive so they can afford coverage, Zeldin said. The subsidies could be as high as thousands of dollars annually for many individuals, she added.

On Wednesday, Aetna and Coventry said they were pulling out of Georgia’s exchange. Their decision has left just five insurers to offer coverage in the online marketplace.

Hudgens, in an appearance on Fox News Channel’s “On the Record with Greta Van Susteren’’ on Wednesday night, said two of the five remaining insurers have expressed concern that they would be hit with more new members than they could handle.

He did not identify the two companies, nor did he elaborate on that situation Thursday.

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.

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.

A federal official indicated Wednesday that the Georgia rates were under review.

Graham Thompson, executive director of the Georgia Association of Health Plans, said Thursday that questions about the affordability and effectiveness of the exchange will be answered as events unfold. “Every [insurance] environment is unique,’’ he said.

Hudgens said this week that under the new rates, people under 35 will see increases of more than 100 percent. 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.

Hudgens added Thursday in his statement, “President Obama has repeatedly assured Americans that his health care law would not increase cost on the American people. However, those assurances are not holding true in Georgia.

“I urge Congress and the White House to repeal, or at a minimum, delay implementation for a year so that Georgians could be spared from the certain consequences of this federal law.”

Zeldin said that Hudgens’ remarks might deter people from getting information about the exchange just when they need it most.

“We’re two months away,’’ she said. “This is the time we should be shifting out of political rhetoric… and we should be providing the full picture to consumers.’’