By Michael P. Norton
STATE HOUSE NEWS SERVICE
Ahead of summer rate filings, the Division of Insurance and the Massachusetts Health Connector have for several weeks been working with insurance carriers to provide guidance in connection with the possible loss of “cost sharing reductions” that would affect federal subsidies for plans offered through the Connector, the News Service has learned.
In letters to U.S. senators last month, Gov. Charlie Baker said Massachusetts insurers could be on the hook for $63 million in unreimbursed costs for the rest of 2017 and $123 million in 2018 if federal cost sharing reduction (CSR) payments are not “resolved affirmatively.”
The Hill recently reported that insurance commissioners around the country are taking pro-active measures – later filing deadlines, flexibility and even tax relief – to retain insurers in state marketplaces, hold down premium increases, and ensure consumer choices as Washington debates changes with the potential to destabilize insurance markets.
Asked if the acting Massachusetts insurance commissioner had taken any steps, a spokesman for the Office of Consumer Affairs and Business Regulation, which oversees the insurance division, said draft guidance is being developed “which would inform the carriers on next steps.”
The spokesman, Christopher Goetchus, also issued a statement assessing the current Bay State market. “Massachusetts’ private commercial insurance market is among the healthiest in the country and consumers here continue to have a wide variety of options. The Baker-Polito Administration continues to advocate for the Commonwealth’s priorities so that all residents have access to the health coverage they need.”
The fate of the CSR subsidies hangs in a lawsuit, House v. Price, initially filed by House Republicans against the Obama administration.
An official at the Massachusetts Association of Health Plans (MAHP), which represents insurers, said guidance is critical ahead of July rate filings.
“Neither Congress nor the Trump Administration has made a commitment to continue monthly cost-sharing reduction (CSR) payments beyond May and the elimination of these payments would jeopardize coverage for thousands of low-income Massachusetts residents,” said Eric Linzer, executive vice president of MAHP. “Given this uncertainty, we have been in discussions with the Division of Insurance and the Connector on the possible loss of CSR payments.”
Linzer continued, “As health plans are preparing to file their 2018 rates at the beginning of July, it is critical to provide the marketplace with clear guidance to ensure protection for consumers receiving these benefits and that health plans are not put at serious financial risk by a broken federal promise if the cost-sharing reductions are eliminated.”
To prevent insurers from dropping out of the market or raising premiums, Baker said in a letter to U.S. senators last month that it’s critical that Congress ensure a transition period before possible major changes to the Affordable Care Act would take effect. Baker cautioned senators weighing a House-approved health care reform bill about unreimbursed costs Massachusetts insurers could face if cost sharing reduction payments are not “resolved affirmatively.”
“This will disrupt our hard earned market stability, potentially increasing 2018 premiums drastically, causing insurers to withdraw plans and reducing access for lower income residents,” Baker wrote to Senate Finance Committee Chairman Sen. Orrin Hatch and ranking Democratic member Sen. Ron Wyden, with identical letters sent to the Senate Budget Committee and the Senate Health, Education, Labor and Pensions Committee.
The CSRs are available for individuals and families with incomes up to 250 percent of the federal poverty level, or about $60,625 for a family of four. According to Massachusetts insurers, 244,400 enrollees in 2016 benefited from cost sharing subsidies that go toward lowering out-of-pocket expenses such as co-pays and deductibles.