In a blow to consumers insured on the state’s Obamacare exchange plan, Blue Cross Blue Shield of Georgia has proposed to raise rates an average of 40.6 percent in 2018.
Blue Cross said that if policy in Washington weakens the exchange, it may even pull out of the Georgia Obamacare market.
The insurance company is the only one left that insures residents in every county in the state under the Affordable Care Act, also known as Obamacare. Three other insurance companies have signaled they will continue offering plans in parts of the state. But they, too, have proposed rate increases: averaging 12.4 percent for Ambetter, 18.6 percent percent for Alliant and 25 percent for Kaiser. Humana is staying in the small-group market, but it announced earlier this year that it would drop out of the individual market.
“Yikes!” Jocelyn Mills, a self-employed information technology consultant who paid for breast cancer treatment with her Blue Cross exchange plan, said upon hearing the news from a reporter. “I’m afraid. Yeah I’m afraid.”
The rate proposals are not final and will go through months of negotiations with the state. But they drew immediate criticism from both supporters and opponents of Obamacare.
Opponents called the rate hikes evidence of the inevitable collapse of a failed system.
Supporters of the health care law said the timing was no coincidence, charging Republican opponents in Congress and the White House with destabilizing the market and virtually ensuring the hikes.
“They’re all playing politics with it,” Mills said. “They need to sit down and fix it and bring the overall costs down.”
‘Pricing out people’
The rate increases, if enacted, will immediately present middle-class and upper-class policy holders — who don’t qualify for the Obamacare premium subsidies and must pay full price for premiums — with the question of whether to drop insurance entirely, Kirk Lyman-Barner said. He specializes in Obamacare plans in Sumter County.
“It really is pricing out people,” he said. “It costs more than a house payment. People are just going to say, ‘No, I can’t do it.’ ”
Analysts have said that insurance companies are beginning to price political uncertainty into their rates, as Republicans now in power have openly threatened to end subsidies and penalties that are key to making it function. Lyman-Barner believes the insurance companies are responding to the moment to make a buck.
“It’s because they can; their job is to make a profit,” he said. “They are, some people would say, exploiting the uncertainty. Others would say they’re being prudent, knowing they’re going to have less people enrolled.”
Blue Cross said it had taken uncertainty into account, as well as a pool of patients that was sicker than expected, as healthy patients may have stayed out.
Even so, the company said in a statement, if the White House makes a final decision not to fund the cost-sharing subsidies, the company will revise its proposal with the possibility of raising rates or “exiting the (Obamacare) market in Georgia altogether.”
A fellow resident of Sumter County, Gerald Smith, said such arguments are “just political rhetoric.”
“I don’t buy that,” said Smith, who heads the county’s Republican Party. “The Obamacare was failing on its own. It’s just real handy for the liberals, the Democrats who want socialized medicine, to blame everybody else.”
Whatever caused it, there is virtually no argument that rising medical costs are increasingly a danger to household budgets. Premiums in recent years, along with deductibles and shared costs such as co-pays, have risen to levels drawing concern from Georgians and Americans reflected in polls.
“What we need to do is get some certainty, and it needs to be certainty that benefits consumers,” said Cindy Zeldin, the president of Georgians for a Healthy Future. “And of course the Department of Insurance should do everything in its power to make sure any rate increases it approves are fair and justified.”
All recognize that private companies have to make a profit. The question is what’s fair. If this is fair, said Jimmy Lewis, who helps run Hometown Health, a coalition of rural hospitals, something’s not working.
As high as 75.5 percent
When Lewis heard the top of the rate range — Blue Cross could charge as much as 75.5 percent more next year for one particular “gold” level plan in southwest Georgia — he went through three expletives before he came up with a printable reaction. “That is — gosh,” he said. “That’s a breath taker.”
“Imagine someone’s paying $700 a month and they get an increase like that,” he said. “Where are they going to get $400 or $500 a month? I mean, that is just simply not in the cards. What we have here is imputed personal bankruptcy through the insurance program.”
In 96 of Georgia’s 159 counties, Blue Cross is currently the only Obamacare exchange insurer. The meaning of the increase for rural hospitals, and rural economies, is grim, Lewis said. More people will show up to the hospital without insurance, and the hospital will take on the debt.
“Obviously, for those people to go uninsured means that that is a cost shift of health care directed to the hospital,” Lewis said, “and subsequently to the local county governments who have to subsidize the loss.”
‘No action … not an alternative’
GOP plans now under consideration in Washington have proved to be unpopular in national polling and among a wide swath of advocacy groups. It could mean Mills gets some of the bipartisan action she wants.
Just hours after the Georgia rates were made public, U.S. Senate Majority Leader Mitch McConnell told a Rotary Club luncheon in deeply conservative southern Kentucky that “we’ve got the insurance markets imploding all over the country, including in this state.” The rates of increase were unusually high for Georgia, but other states such as Arizona have seen even worse.
According to The Associated Press, McConnell said that “if my side is unable to agree on an adequate replacement, then some kind of action with regard to the private health insurance market must occur.”
He added, “No action is not an alternative.”