Insurers partly blame Obamacare rate increase in Indiana on end of individual mandate

Maureen Groppe | IndyStar

Show Caption Hide Caption Americans' uninsured rate rose in 2017 According to data from Gallup and Sharecare, the number of uninsured Americans rose by 1.3 percentage points in 2017.

WASHINGTON — Rates are going up for the Obamacare plans sold in Indiana, although the average 5.2 percent increase insurers requested for 2019 doesn’t appear to be as high as in some other states.

Still, the two participating insurance companies say their rates are in flux in part because of recent actions by Washington, including Republicans’ elimination of the penalty for not having insurance.

The Trump administration argues it wants to give consumers more choices, including going without coverage and buying cheaper plans that don’t include all the benefits required by the Affordable Care Act.

Insurance companies say that will pull the healthier people out of the Obamacare market, leaving them with a more expensive pool of patients to cover next year.

By contrast, CareSource says it could cut premiums by 10 percent if all the young and healthy Hoosiers eligible for Obamacare plans sign up next year.

Instead, CareSource is seeking an average 10 percent increase in premiums, according to its rate request recently filed with the Indiana Department of Insurance. Its average premium would be $540 a month, if approved by the state.

Celtic Insurance is seeking to lower rates by half a percentage point on average, which would give them an average premium of $479.

Celtic had raised rates an average 36 percent for 2018, and CareSource raised them 20 percent, in part because the Trump administration stopped reimbursing insurance companies for the discounts they’re required to give low-income customers on deductibles and other out-of-pocket expenses.

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“It’s a lot more expensive,” said Adam Brand of Indianapolis, who pays about $1,150 a month for insurance for his family of four. The Brands are not eligible for premium subsidies that protect the majority of Hoosiers using the marketplace from rate increases.

About 167,000 Hoosiers selected 2018 plans through the insurance market created by the Affordable Care Act for people who don’t qualify for a government plan and aren’t offered insurance through an employer.

Although only 7 percent of the U.S. population purchases insurance on their own, that segment of the market has been the focus of the political fight over whether the Affordable Care Act has been successful.

As insurance rates rose during the Obama administration while companies were figuring out how to price their plans for a new market, Republicans crowed.

Now that Republicans are in charge, Democrats have been eagerly awaiting insurance rate filings around the county.

The most popular exchange plans could increase 15 percent on average, the health care consulting group Avalere recently estimated after reviewing initial filings in 10 other states.

After Indiana’s rates became public Thursday, Sen. Joe Donnelly, D-Ind., said the increases some Hoosiers could see are “unnecessarily being driven by the administration’s continued and deliberate efforts to undermine the marketplaces.”

Indiana GOP Chairman Kyle Hupfer accused Donnelly of “doubling down” on his support for Obamacare instead of admitting its failures.

GOP Senate challenger Mike Braun calls Obamacare an “unmitigated disaster” that can be fixed only by repealing and replacing “every word” of the 2010 law.

Donnelly supported his claim with letters from CareSource and Celtic written in response to questions his office asked the insurers about their rate filings.

Michael Neidorff, chairman and CEO of Celtic’s parent company, said insurers could have potentially lowered rates in 2019 if the federal government hadn’t stopped reimbursing them for the discounts given to lower-income earners. And setting a price for 2019 is difficult, Neidorff wrote Donnelly, because of the uncertainty caused by the repeal of the individual mandate and the Trump administration’s expansion of short-term plans that don’t comply with all the ACA requirements. The impact of those changes may not be fully known until next year, he said.

Steve Smitherman, president of CareSource’s Indiana market, said repeated attempts by the Trump administration to repeal the ACA have created an unstable environment that makes it difficult for insurers to commit to staying in the market.

“Efforts to undermine the ACA have directly driven annual premium increases that have priced the desired healthcare coverage out of reach for many consumers,” Smitherman wrote.

In addition to higher costs anticipated because of the elimination of the mandate to buy insurance, CareSource also wants to raise rates to make up for not collecting enough premiums in 2017 to cover costs, and because of expected increases in medical services and prescription drugs, the company said in its rate filing with the Indiana Department of Insurance.

CareSource plans to sell insurance in 79 Indiana counties next year.

Celtic, which offers plans in 43 counties, intends to extend coverage to all 92 counties next year.

The Indiana Department of Insurance has until late September to review the rate requests.