HARTFORD, CT — Even though Connecticut anticipated President Donald Trump would eliminate Obamacare subsidies, consumers purchasing plans on Connecticut’s insurance exchange may have a difficult time choosing a plan this year.
That’s because the elimination of the subsidy has changed the calculations for silver plans. Those plans saw an increase in the rates to compensate for the loss of the cost-sharing reductions (CSRs), which were used by insurance carriers to lower the deductibles, co-pays, and co-insurance of lower income consumers.
Trump announced earlier this month that he was ending those payments. The good news was Connecticut had anticipated the move and had already asked insurance companies to resubmit their rates assuming the subsidy would disappear.
The Insurance Department approved the rate increases for 2018 in September. Connecticut’s insurance regulators decided to allow two carriers to boost their premiums for plans on the individual market in 2018 by an average of 31.7 percent for Anthem and 27.7 percent for ConnectiCare Benefit customers.
Ann Lopes with Access Health CT said there are some anomalies with the new 2018 rates offered by Anthem and ConnectiCare, which make some gold plans in two counties less expensive than a silver plan.
However, consumers can’t just shop based on what their monthly premium will be because there could be higher out-of-pocket costs for care under certain plans. That means consumers will have to calculate the out-of-pocket expenses and the monthly premium.
The rates are also based on what county a person lives in. There are different rates for different plans in different counties.
The standard silver plan has a $3,700 deductible and a $250 deductible for prescriptions with a $7,350 out-of-pocket max. In many cases the increases in the cost of a silver plan will be covered by an increase in the monthly premium tax credit, but that’s only for individuals and families under 400 percent of the federal poverty level.
Paul Philpott, a member of the Access Health CT board of directors, said he’s concerned about the rate increases for consumers who don’t receive subsidies.
He said they will be paying so much of their income for their insurance that it would be considered “unaffordable” under the Affordable Care Act.
For example, a family of four on a silver plan making $160,000 a year will be asked to pay about 13.6 percent of their pre-tax income, or around $21,760 per year, on a silver plan.
The silver plans saw the biggest increases because of the elimination of the cost-sharing reductions. It means the family of four making $160,000 a year would pay around $1,800 per month in premiums on the lowest cost silver plan.
Families who make less than 400 percent of the federal poverty level can’t be charged anything more than 9.5 percent of their income for health insurance.
“I’m concerned we’re reaching a tipping point where we could be creating a new set of uninsured people,” Philpott said.
He said he understands they have a responsibility to affordability, but he’s uncertain how they can impact these types of higher costs.
There’s also the option for consumers to purchase plans off the exchange, and those don’t have to cover certain benefits and could have a lower monthly premium.
But there is also no opportunity to receive a tax subsidy to offset the cost of the monthly premium, off the exchange, so if those individuals lose income they won’t be able to switch to an on-exchange plan if their income goes down in the middle of the year.
According to Lopes a majority of the bronze level plans are less costly on-exchange than they are off-exchange. At the same time one silver plan on-exchange in Hartford County is lower in price than the silver plans offered off-exchange.
Grant Ritter, another Access Health CT board member, said it just happens that the family of four making $160,000 a year is “the odd man out.”
He said health care costs are “unsustainable” and these families “just got caught in the trap.”
It’s unlikely, according to Ritter, that they would be paying this much for health insurance if they had employer-sponsored plans. But if these individuals had employer-sponsored plans there would be no reason for them to purchase insurance on the exchange.
Robert Tessier, an Access Health CT board member, said he believes they’re past the point where things are affordable.
Philpott said it’s going to increase the number of uninsured in the state, which reached historic lows over the past few years.
Last year 4.9 percent of Connecticut residents didn’t have coverage. That’s down by almost half from 2013.
Open enrollment begins on Nov. 1 and goes to Dec. 22. It’s the shortest enrollment period since the exchange opened in 2013.