All carriers selling health insurance in the individual Maryland market have propose the premium rate is increasing this year, due to the impact of COVID-19 on health claims costs.
CareFirst BlueChoice, the largest provider in Maryland’s individual market with 149,043 members in the state, is asking for an average rate change of 11.2%. Under this proposed increase, a 40-year-old man in the Baltimore metropolitan service area enrolled in CareFirst BlueChoice’s least expensive Silver plan would go from $323 per month in 2022 to $353 in 2023.
In a filing with the Maryland Insurance Administration, the company attributed the need for the rate increase to “1) increasing base period claims experience, 2) trend, 3) 1,332 State Innovation Waiver for reinsurance, 4) projected morbidity, and 5) increases in assumed actuarial values of the plan.
Overall, CareFirst’s Group Hospitalization and Medical Services, Inc. and CareFirst of Maryland, Inc. are requesting a 25.9% increase for the same reasons.
The bottom two insurers in the market, Kaiser and UnitedHealthcare, are asking for rate changes of 7.2% and 8.7%, respectively.
Overall, insurers in Maryland’s individual market created under the Affordable Care Act — sometimes called Obamacare — have offered to raise their premiums by an average of 11%. The changes will impact more than 240,000 insured Marylanders who receive their health coverage through the Individual Marketplace (the vast majority of Marylanders are employer-insured).
All business requests are significantly upper than last year, when the highest average rate change request came from CareFirst BlueChoice, Inc., which only requested a 7.9% rate increase.
In the press release, Maryland Insurance Administration Commissioner Kathleen A. Birrane attributed the increase to the impact of the pandemic on insurance claims.
“It is clear from our ongoing monitoring of industry experience that 2021 claims have been heavily influenced by COVID-19, and that the significant differences between where we were in 2021 and where we are likely to be in 2023 must be modeled and factored into development rates,” she said.
This was not taken into account as much when developing rates last year, as that process used claims from 2020. Although 2020 includes a surplus of claims filed by COVID-19 patients, those- these have been offset by patients who have deferred care, fearful or unable to travel to hospitals and doctor’s offices during the pandemic.
Last year’s claims, however, include both high volumes of claims related to COVID-19 and high levels of claims from patients ultimately receiving care they deferred during the early parts of the pandemic. according to MIA spokesman Craig Ey.
“Last year, carriers projected that non-COVID usage would rebound to ‘normal’ levels and COVID-related costs would increase relatively normally,” Ey said in an email.
Some of the direct costs of COVID-19 were also higher in 2021 than they were in 2020, thanks to the added cost of vaccinations and some hospitals increasing the cost of treatments.
Ey said it’s too early to analyze whether these trends are consistent across states, as only Maryland, Vermont and Oregon have received their 2023 rate proposals so far.
MIA’s actuarial team, which is evaluating the proposed rate increases, plans to request more data and analysis regarding the number of insurance claims in 2021 that can be attributed to COVID-19 and whether any adjustments are needed.
The administration will hold a public hearing on the proposed rates in July, and the commissioner will approve, disapprove or modify the proposed premiums by September.