Coronavirus and inflation drive up the cost of health insurance in Maryland

Coronavirus and inflation drive up the cost of health insurance in Maryland

Those who buy their own health insurance in Maryland will pay an average of 6.6% more next year, about 4.4% less than carriers requested, according to the Maryland Insurance Administration, which approved the increases.

State agency officials said in May, when insurers asked for the increases, they expected costs related to the coronavirus pandemic to raise the price of health insurance offered in the Maryland by the Tri-Carriers under the Affordable Care Act, also known as Obamacare.

Since then, rising inflation has become a factor, although approved rate increases fall below the pace of inflation which has averaged 8.4% this year, noted Kathleen A. Birrane, Commissioner for Maryland Insurance.

The increases affect more than 232,000 people who purchase insurance through the state’s health care exchange or directly from an insurance company. Most of them are not insured by their employer.

The rolls have grown over the past year with special registration periods aimed at reaching people who have lost their jobs and insurance during the pandemic. Medicaid, the federal state health insurance program for low-income residents, has also increased, though the state is resuming checks to see if people still qualify after a pause during the health emergency.

Under the approved increases, rates for a 40-year-old Baltimore-area resident on the lowest priced silver plan would increase:

  • 3.8% for the CareFirst BlueCross BlueShield HMO plan which covers more than 149,000 people. Monthly premiums would increase by $12 to $335.
  • 13.3% for the CareFirst BlueCross BlueShield PPO plan which covers nearly 16,300. Premiums would increase by $60 to $513.
  • 4.5% for United Healthcare’s HMO plan, pushing premiums up $15 to $350.
  • 2.7% for Kaiser Permanente’s HMO plan, pushing premiums up $7 to $268.

About 80% of people receive federal grants to help cover the cost of these premiums. These will continue to be improved under legislation recently passed by Congress through the Inflation Reduction Act.

This should help people continue with the insurance they purchased during the pandemic, in addition to other young adult grants and other existing grants, said Michele Eberle, executive director of the Maryland Health Benefit Exchange.

“The past few years have proven that Marylanders recognize the importance of having health coverage,” she said in a statement. “Although health plan prices are rising for some Marylanders, savings are available. We are grateful that the Cut Inflation Act keeps financial assistance in place for many people through 2025.”

The cost of the plans had fallen for several years after a reinsurance program adopted by the General Assembly in 2018 helped offset the costs associated with the most expensive beneficiaries. Birrane credited the program with preventing higher rate increases.

“The reinsurance program continues to do its job,” Birrane said in a statement.

“The 2023 rate changes are tied to increased claims costs and projections as to what those costs are likely to be in 2023, given claims cost trends. Inflation, rising service unit costs, increased utilization and continued COVID-related cost uncertainty are all significant factors affecting rates,” she said. “Nevertheless, we were able to keep rates below inflationary trends thanks to the reinsurance program.”

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CareFirst officials noted in a statement that while the state’s reinsurance program has been a stabilizing force, there is still a need to find ways to reduce the underlying cost of health care.

“CareFirst looks forward to collaborating on future initiatives to advocate for lowering the cost of care and making health care more affordable,” it said in a statement.

Kaiser officials said in a statement that the rates for 2023 reflect “the expected costs of providing high-quality health care and coverage to all of our members over the long term.”

UnitedHealthcare did not respond to a request for comment.

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