In the face of proposed double-digit rate increases for Obamacare insurance next year, consumer advocates and lawmakers are pressuring Illinois regulators to do more to protect consumers.
Representatives of more than half a dozen Illinois consumer advocacy groups wrote a letter to the head of the Illinois Department of Insurance earlier this month urging the state to take action. Democratic Sens. Dick Durbin and Tammy Duckworth wrote a similar letter to the same official.
The department confirmed Wednesday that it has already taken action on at least one of those requests to try to hold down costs for consumers and make rate-setting more transparent — but not all of them.
Average proposed rate increases in Illinois, released Aug. 1, ranged from 5 percent to 43 percent for plans on the Obamacare exchange next year. A number of insurers in Illinois have cited ongoing uncertainty coming out of Washington, D.C., as a reason for those jumps.
Much of the uncertainty for insurers revolves around whether they will continue receiving federal subsidies, known as cost-sharing reduction payments. Those subsidies help insurers offset the expenses of reducing deductible and copay costs for lower-income consumers.
The federal government, however, does not necessarily have to continue making those payments to insurers, following a federal court decision. And President Donald Trump has threatened to end the subsidies, calling them “bailouts” for insurance companies.
To help soften the blow of potential rate hikes, the state has advised insurers to load into silver-level plans the potential costs of not getting subsidies.
That move could help consumers who buy insurance on the exchange by increasing the amounts of the tax credits they get. That’s because the tax credit levels rise based on the price of the second-lowest-cost silver plan, said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms. It could also spare consumers who don’t get tax credits from subsidy-related price increases if they buy bronze or gold-level plans on the marketplace, she said.
Advocates and legislators have also requested the department take a number of other actions to improve transparency when it comes to the rates and shield consumers from increases.
“We were extremely alarmed by the proposed increases,” according to a letter from groups including EverThrive Illinois, the American Civil Liberties Union of Illinois and the Heartland Alliance, among others.
The letters ask the department to follow the lead of other states and require insurers to submit two sets of proposed rates for next year — one assuming the federal subsidies for insurers continue and one assuming they don’t.
“It’s the Department of Insurance’s role as the state regulator to protect and do business in the best interests of Illinois consumers,” said Stephani Becker, a senior policy specialist at the Sargent Shriver National Center on Poverty Law, one of the groups behind the requests. “It’s their job to reach back out to insurers and ask them to refile these rates in a way that (shows) what the harm might be to consumers with and without the (subsidy) payments.”
But Department of Insurance spokesman Michael Batkins said in an email that the department has “consistently only allowed companies to submit one set of rates for Marketplace plans.” He noted that, as in years past, insurers can still submit revised rates for a time.
Department Director Jennifer Hammer said in a statement, “(The Department of Insurance) is committed to protecting consumers from higher health insurance costs due to uncertainty in Washington.”
Blue Cross and Blue Shield of Illinois spokeswoman Colleen Miller didn’t say whether the insurer plans to submit revised rates, but she said in a statement it’s concerned by the uncertainty surrounding the subsidies. Blue Cross supports the new September deadline to resubmit rates — recently extended by the federal government — but it would need certainty about the subsidies by Aug. 31 to meet that deadline, she said.
A representative of Health Alliance Medical Plans said the insurer is “evaluating” recent changes to the deadlines for submitting revised rates. A spokesman for Cigna did not respond to questions by deadline.
A number of other states, including New Mexico, Michigan and California, have allowed insurers to submit two sets of rates, said Georgetown’s Corlette.
Corlette said requiring two sets of rates can be time-consuming both for insurers that have to file them and regulators who have to review them. She said regulators, across states, are trying to decide how to handle the uncertainty.
“I think many of us had hoped there would be some certainty about whether the (subsidies) would be funded by now, by late August, but unfortunately, there’s not, so that’s putting a lot of state departments of insurance into uncomfortable positions,” Corlette said.
The advocates have also asked the department to require insurers to offer silver plans outside the exchange that don’t include the costs of not getting the subsidies. Such a requirement would allow Illinois consumers who aren’t eligible for tax credits to buy cheaper plans outside the exchange. Batkins did not comment on whether the department plans to impose that kind of a requirement.
He also did not respond to a request for comment by deadline Thursday on when the department advised insurers to load the potential costs of not getting subsidies into their silver plans or whether the department did so in response to the requests from consumer advocates and lawmakers.
Most Illinois residents get health insurance through employers or government programs such as Medicare and Medicaid, but this year, more than 350,000 Illinois residents enrolled in plans purchased through the exchange.