Analyst: What to expect from Missouri’s 2019 health insurance marketplace

July 25 marked the last day for insurers who plan to offer 2019 coverage to report rates with the Missouri Department of Insurance. Rabah Kamal, a policy analyst at the Kaiser Family Foundation, says 2019 marketplace prices in Missouri will increase moderately, while one plan should see a steeper increase.

In 2018, Missouri’s marketplace premiums have reached a historical peak. According to Kaiser, a nonprofit research organization focused on health care and health policy, marketplace plans saw price increases of at least 27 percent for the year. Such plans are grouped into four tiers — Bronze, Silver, Gold and Platinum, from the lowest premium to the highest.

The big price increase in 2018 came from uncertainty raised during the summer of 2017, Kamal said, when insurers were setting rates and deciding what premiums would be when enrollment opened in November.

The uncertainty arose when the Trump administration said the federal government might stop reimbursing insurers for cost-sharing reduction (CSR) subsidies the upcoming year, Kamal said.

The CSR subsidy is a discount for Silver plan enrollees that lowers the amount of payment for deductibles, copayments and coinsurance, according to Insurers are required by the Affordable Care Act to provide CSR subsidies for lower-income enrollees.

Since 2014, the government had used direct payments to reimburse insurers for CSR subsidies.

“So insurers don’t know what was going to happen,” Kamal said of the situation last summer. “That’s quite a bit of money that they’re expecting to get back from the government, and they still have to offer those subsidies.”

With that uncertainty, a lot of insurers braced for the possibility of losing those CSR payments by increasing their premiums even more than they had already planned to for 2018, Kamal said. On average, insurers added 20 percent on top of planned increases.

Ultimately, insurers’ concerns were realized. In October, the Department of Health and Human Services announced the end of reimbursements to insurers for the costs of CSR subsidies.

As a result, insurers will continue to increase rates for 2019 premiums, Kamal said. More specifically, they will increase the price of Silver plans — where the CSR subsidies come into effect — to compensate for the loss of the reimbursements.

In addition to CSR payments, the repeal of the Affordable Care Act’s individual mandate is also a key factor in the predicted increase in 2019 premiums.

The individual mandate required most Americans to buy insurance or pay a penalty. Congress voted last December to eliminate that requirement starting in January 2019.

“It’s possible that healthier people who don’t necessarily feel they need coverage might not sign up for coverage for 2019,” Kamal said.

This year, insurers have built in rate increases to account for the repeal of the individual mandate.

Consequently, people who aren’t receiving subsidies (in most cases, middle class people) are the first to feel the brunt of the premium increases. Currently, nationwide enrollment for those people has declined because of the rising prices, Kamal said.

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