Health and Science

States push back deadlines for health-insurance rates amid uncertainty

House Speaker Paul Ryan, a Republican from Wisconsin, walks away after speaking during a news conference on Capitol in Washington, D.C., U.S., on Friday, March 24, 2017.
Andrew Harrer | Bloomberg | Getty Images

With no deal on new health-care legislation and uncertainty about how long the White House will subsidize insurers' participation in the Affordable Care Act, states have begun pushing back deadlines for insurers to submit rates for 2018.

In the last week, New Hampshire, Kentucky and Colorado have moved rate deadlines to June from April or May to give insurers more time to assess the market.

New Hampshire had originally requested 2018 rates by April 24; that date is now June 2, according to a memo from the state's insurance department. Michael Wilkey, the department's director of life, accident and health insurance, told CNBC that new guidance from lawmakers or the White House could cause the deadlines to be pushed back further, if necessary.

"We are watching what unfolds in Washington like everybody else is," Wilkey said. "Carriers need to have as much information as possible to see what the market will look like in 2018."

Senior GOP aides are optimistic that Congress, upon returning from recess, can revive the health-care debate after it works to avert an April 28 government shutdown deadline. But if an agreement on a new law doesn't emerge, the White House must decide whether to continue paying out some $7 billion in subsidies to insurers, an issue that is currently being litigated, with a court-ordered deadline of May 22 for the Trump administration to weigh in.

The Colorado Division of Insurance hasn't settled on a firm date yet but is allowing insurers until "mid-June" to submit rates from a previous May 15 deadline.

"In our discussions with the health insurance carriers, they've asked for more time in developing their plans and rates," said Vincent Plymell, a spokesman for the division. "It is due to the uncertainty in the [subsidy] payments, and uncertainty in general about what will happen."

Some states are holding firm on deadlines that fall before that date. California, Connecticut, Maryland and Oregon have May 1 deadlines for rate submissions, and New York plans to keep its May 15 deadline, a spokesperson for the Department of Financial Services said.

Beth Fritchen, a partner at consultancy Oliver Wyman, said insurers who submit plans based on the status quo can decide at a later date to withdraw, depending on whether Washington takes actions to stabilize the exchanges.

"They're preparing to be in the market, but that could change," said Fritchen, whose firm conducts an annual study on ACA participation.

Nearly all carriers participating in the health-care exchanges plan to remain on them, according to the study. Half of the carriers said it was too early to determine how to price plans for 2018; the other half expected to raise prices anywhere from single-digit percentages to greater than 30 percent.

Members of America's Health Insurance Plans, the industry's lobby, will meet White House officials to discuss the issue on Tuesday. On April 12, the group sent President Donald Trump a letter saying continued payment of the cost-sharing reductions would be "the most critical action to help stabilize the individual market."

Insurers rely on the payouts from the Department of Health and Human Services to subsidize the costs of offering plans to low- and middle-income enrollees, and analysts have suggested that canceling the payments could cause premiums to spike. The White House told The New York Times there would be no change in policy, but Trump has warned that 2017 would be a "very bad year for Obamacare" with "explosive premium increases, and your deductibles so high people don't even get to use it."

Seven million people who considered purchasing ACA plans for the 2017 exchanges qualified to receive the subsidies — about 60 percent of enrollees, according to AHIP.

States like Kentucky recognize that the White House's position could determine whether insurance carriers choose to participate, and at what cost. Its bulletin delaying the rate filing deadline to June 7 included a line noting HHS has the "ultimate authority for the interpretation" of the Affordable Care Act.