The Trump administration has reversed course on a decision that was expected to increase premium prices for Georgia Obamacare customers and thin their choices.
Instead, 2019 proposals for Obamacare health insurance customers are back on track: shaping up for modest single-digit premium increases and restoration of some sales territory where companies had pulled back.
The announcement Tuesday night reverses a July 7 decision to stop "risk adjustment" payments that the government makes to insurance companies under the Affordable Care Act, also known as Obamacare. The payments help stabilize the Obamacare market, compensating companies for taking on unhealthy customers. Analysts in Georgia said freezing the payments would have likely thrown the market into turbulence again and driven customer costs higher.
At the time of the July 7 announcement, insurance companies had just offered 2019 plan proposals for Georgia indicating that the state's Obamacare market was starting to look stable. Concerns soon arose that the lost payments — which had amounted to about $10.4 billion nationally per year — would spur insurance companies to seek steeper increases in Georgia.
But by Wednesday, the administration said it had solved its problem and the payments would resume.
“Because of the short period of time in which they had a freeze, the actual final impact is likely to be zero,” said Bill Custer, a professor at Georgia State University.
Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, said the decisions were based on court rulings that forced the administration’s hand.
"Issuers that had expressed concerns about having to withdraw from markets or becoming insolvent should be assured by our actions today," Verma said in a statement. "Alleviating concerns in the market helps to protect consumer choices."
Graham Thompson, a lobbyist for insurance companies in Georgia, said earlier this month that the administration’s payment freeze could force companies to raise rates more than they proposed, and possibly retract their sales territory. Thompson did not respond to messages Wednesday seeking comment about whether the lifting of the freeze would allow insurers’ prices to remain lower.
The news this month flowed fast. On July 6, the Georgia Department of Insurance released companies’ proposed premium hikes and territory increases. They seemed relatively good news for customers.
The price increases were a modest 2.2 percent to 14.7 percent, a shadow of the stiff double-digit increases that have ruled in recent years. Moreover, companies that had pulled back or threatened to pull out instead increased their territory. Blue Cross Blue Shield of Georgia, under its parent company Anthem, proposed to return to much of the Atlanta area that it abandoned last year on the individual market.
All in all, the message was clear, analysts said: Insurers seem to be saying they understand the Georgia ACA market at last, and it’s stabilizing. Prices may be too high for many customers, but at least they’ve leveled off.
Other states saw similar news.
The announcement of the freeze came one day later.
Georgia’s Department of Insurance expects to negotiate with insurance companies for their final ACA premiums and territories for 2019 by Aug. 22.
MORE DETAILS
Last year, Obamacare premiums skyrocketed in Georgia, with Blue Cross proposing an average increase of more than 57 percent and most other companies not far behind. On July 7, the state released those companies’ proposed premium increases for 2019, and this time they’re much closer to normal medical inflation. The companies and state will agree on final numbers by Aug. 22.
- Blue Cross Blue Shield of Georgia: 2.2 percent
- Alliant: 5.7 percent
- Ambetter: 8.8 percent
- Kaiser Permanente: 14.7 percent
Source: Georgia Department of Insurance
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