by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
It’s the fourth consecutive year that the state’s largest insurance company has asked the Department of Insurance (DOI) to approve double-digit premium hikes for policyholders who purchase health insurance on their own.
Blue Cross and Blue Shield representatives explained the reasoning behind the 23% rate increase proposal during a media briefing that was held last week. It’s because the Trump Administration has delayed its decision on how they will handle House v Price, an Obamacare lawsuit in which the US House of Representatives sued the Obama Administration for issuing cost-sharing reduction subsidies to insurance companies without Congressional approval.
Insurance companies are paid these subsidies in exchange for abiding by Obamacare’s requirement in which they must offer health plans that come with discounted deductibles and co-pays for certain low-income policyholders. For example, a family of three with a household income of less than $50,000, or individuals making less than $30,000, can qualify for these type of policies. In North Carolina, over two-thirds of BCBS NC customers enroll in cost-sharing reduction plans.
The problem with the cost-sharing subsidies, however, is that a federal judge sided with the House’s position, striking down the subsidies as illegal. This decision prompted the former Obama Administration to issue an appeal, and the Trump Administration has not announced whether it will stop the temporary continuation of these subsidies, or have Congress re-write the law so that they are in fact legal to distribute.
The uncertainty in Washington leaves BCBCS NC and other insurers that participate in the law’s Exchanges to underwrite policies that don’t factor in any cost-sharing subsidies – resulting in larger premium increases. If that’s the case for 2018 plans, then policyholders will be exposed to the actual cost of Obamacare.