Uncertainty in Washington, D.C., is causing insurance premiums to rise in Wyoming.
On Aug. 3 Blue Cross Blue Shield of Wyoming, the only insurance provider on the federal health insurance exchange in the state, announced a 48 percent increase in premiums. In comparison, the average increase in premiums last year was under 10 percent.
Spokeswoman and Senior Director Wendy Curran said the national turmoil over the direction of health care is partly to blame. There are roughly 2,700 residents of Teton County who are covered under the Affordable Care Act on about 1,975 policies.
Curran said this change is only for people on those plans, but she can’t guarantee that those on self-funded insurance plans, large group or government accounts won’t see premium increases in the future.
“This rate increase does not impact other groups,” Curran said. “Will there be one? I don’t know. But not everyone is going to feel a huge 48 percent increase.”
Insurance companies were required to file their expected 2018 rates with the federal government in May. Even then, discussions of repealing and replacing the Affordable Care Act, also known as the ACA and Obamacare, were underway.
“In May there was still quite a lot of discussion going on in Washington, D.C., about repealing the ACA or replacing the ACA with various bills,” Curran said. “That uncertainty, which impacts our rates a great deal, unfortunately continues today.”
A major factor of concern for Blue Cross Blue Shield, Curran said, is the threat of losing cost-sharing reductions — funding from the federal government that helps lower-income people with out-of-pocket costs like deductibles and copays.
“It was an effort to make sure people could get to the doctor when they needed to and get prescriptions without having such a huge upfront cost that might cause avoidance,” Curran said.
The law requires that insurance companies sell policies to people who qualify for that assistance at a reduced price that reflects federal funding. But if federal funding isn’t offered the company would be on the hook for the difference.
Curran said the uncertainty surrounding cost-sharing reduction funding accounts for 15 percent of the rate increase. In Wyoming 56 percent of people covered under the ACA are enrolled with cost-sharing reductions.
“We had to predict what we thought was most likely,” Curran said. “And as an insurance company we went with the worst-case scenario rather than the best-case scenario. We were hoping it would be resolved by now.”
Another component factoring into the premium increase, Curran said, is the individual mandate, which requires everyone to have insurance and faces an uncertain future.
“Again, that’s an issue that appears to be part of the discussion in Washington at the time,” Curran said. “Will they repeal the individual mandate? Will they simply not enforce it?”
When everyone isn’t required to have insurance healthier people tend to opt out.
“That simply causes the rates for the insured population to go up dramatically,” Curran said.
The uncertainty surrounding this, Curran said, resulted in another 6 to 7 percent increase in premiums. Other factors that increased premiums include the health insurance tax on premiums that is part of the Affordable Care Act, high health care costs in Wyoming and an increase in the cost of prescription drugs.
“These kinds of costs make an impact on everybody’s rates,” Curran said.
Another factor, Curran said, is that a lot of people in Wyoming use myriad health care services.
“The exchange population represents a lot of people who couldn’t get health insurance before, so now that they have health insurance, they’ve had health conditions and pent-up demands to get themselves back on track by using more health care services,” Curran said.
Some Republican politicians, including Wyoming Sens. John Barrasso and Mike Enzi, say the premium increase points to why the Affordable Care Act has to go.
“The proposed premium increases are more evidence that it is urgent that we replace the current law with one that actually keeps the promise of lower premiums,” Barrasso said in a statement through his press secretary, Laura Mengelkamp. “Last week, I voted for reforms that would give patients more choices, more freedom and at lower costs. These ballooning rate increases are hurting people in Wyoming, and it underscores how important it is that we get people relief.”
Enzi said it was “disappointing” to hear the news of premium increases, but it was “what we have come to expect under Obamacare.”
“Wyoming already had one of the largest premiums in the nation and only one choice of insurer,” Enzi said in a statement through his press secretary, Max D’Onofrio. “Uncertainty over stability of the Obamacare exchanges has been an issue from Day One. That is why Congress must continue to work on solutions that will make health care more affordable and accessible to more people. The status quo is failing — the current law is not workable and I will keep working to make real changes.”
But Curran said that isn’t quite true.
“I think there’s more involved,” she said.
While there may have been a rate increase again this year due to the high cost of health care in Wyoming and the higher rate of utilization of services, Curran reiterated that it wouldn’t have been this large without uncertainty in Washington, D.C., over the future of American health care.
“It certainly wouldn’t have been this significant under the ACA as it is without this discussion and pretty clear strategy to make changes to the plan,” Curran said.
There is some good news for residents covered under the Affordable Care Act. About 70 percent of people who qualify for cost-sharing reductions also qualify for subsidies — and those subsidies are based on premium levels. In Teton County roughly 90 percent of federal marketplace enrollees receive a subsidy.
So if their premiums go up, their subsidies should also go up — hopefully making the real cost increase less than the 48 percent Blue Cross has proposed. But because there is so much variation between individuals and plans, Curran said, there’s no way to know for certain.