Only two health-insurance companies offer 2018 individual plans on exchange; asking for rate increases averaging 27.5 percent

Update 8/11/17: The Centers for Medicare and Medicaid Services has extended the rate filing deadline for 2018 Obamacare marketplace plans until Sept. 5. 

By Melissa Patrick
Kentucky Health News

The only health insurer offering government-subsidized health plans everywhere in Kentucky for 2018 is asking for rate increases averaging 34 percent, and the only other insurer offering subsidized plans in the individual market wants a hike of almost 21 percent.

The rate requests reflect a base rate that will fluctuate with individual consumers based on their age, whether they smoke and where they live.

Table from Kentucky Department of Insurance website

Kentucky is down to two participating insurers in the individual marketplace for 2018: Anthem Health Plans of Kentucky Inc. and CareSource Kentucky Co., based in Dayton, Ohio.  Humana Inc., which offered individual plans in nine Kentucky counties this year, announced in February that it was leaving the individual market nationwide.

Anthem, which recently announced that it would no longer offer subsidized plan in Ohio, requested an increase of 34.1 percent for its individual policies in 2018.

"Anthem has changed its cost structure in part by making changes to the networks in which people can access doctors under their insurance plan," Boris Ladwig reports for Insider Louisville. "The Kentucky Department of Insurance will analyze the rate requests and decide by Aug. 16 whether they’re warranted. The department can approve, lower or raise the rates."

CareSource requested an increase of 20.8 percent. Overall, the average was 27.5 percent. Insurers offering small-group plans are asking for average hikes of almost 10 percent.

Once again, CareSource will offer exchange plans in 61 counties and Anthem will be the only insurer offering individual plans statewide -- leaving 54 of the state's 120 counties with only one insurer.

The Insurance Department attributes the rate increases to "market forces, an aging population, and systemic instability and uncertainty injected by the failure of Obamacare," the common name it uses for the Patient Protection and Affordable Care Act.

Anthem told Insider Louisville that its proposed rate hike reflects “increases in the cost of delivering medical services coupled with pharmacy expenses and overall increased use of health care services by Anthem members in ACA plans.” The company "warned that it might adjust its request — and its participation in the Kentucky market — in response to legislative changes, especially if the U.S. Congress eliminates or significantly lowers subsidies that help people buy health insurance," Ladwig reports.

The increases have also been attributed to the uncertainties about whether the federal government will continue to pay for cost-sharing subsidies that make coverage more affordable and whether it will enforce the individual mandate that requires everyone to have health insurance or pay a fine.

These uncertainties led Kentucky to extend its filing deadline twice, and has prompted some states to allow insurers to file two sets of premiums for different circumstances: continuation or repeal of the Obamacare cost-sharing subsidies, and the enforcement of the individual mandate.

Insurance Commissioner Nancy Atkins said in the news release that the rate increases are "commonplace for most states."

“DOI has emphasized to carriers that the best possible outcomes for Kentucky consumers must be achieved,” said Atkins. “Obamacare’s failure at the federal level combined with the collapse of the Kentucky Health Cooperative under the Beshear administration placed a substantial strain on the state’s entire healthcare matrix, which continues to impact the current stability of the marketplace.”

The cooperative was a non-profit insurer created under Obamacare to provide more competition in the marketplace, but then was not fully funded by Congress and had to liquidate. It covered 51,000 Kentuckians, many of them the state's unhealthiest people, and those clients have had to find new insurers who must assume their risk.

Both Anthem and CareSource increased their individual exchange policy rates this year by double digits, Anthem by 22.9 percent and CareSource by 29.3 percent.

Kentucky had 81,155 people enroll in coverage through its exchange during the 2017 open enrollment period. Open enrollment in HealthCare.gov for plan year 2018 begins Nov. 1. The release notes that all rates are subject to change and will be finalized by Aug. 16.

CareSource will offer individual exchange plans in these counties: Anderson, Bath, Boone, Bourbon, Boyd, Boyle, Bracken, Bullitt, Campbell, Carroll, Carter, Casey, Clark, Clay, Elliott, Estill, Fayette, Fleming, Floyd, Franklin, Gallatin, Garrard, Grant, Greenup, Harrison, Henry, Jackson, Jefferson, Jessamine, Kenton, Knox, LaRue, Laurel, Lincoln, Madison, Marion, Mason, Menifee, Mercer, Montgomery, Morgan, Nelson, Nicholas, Oldham, Owen, Pendleton, Perry, Powell, Pulaski, Robertson, Rockcastle, Rowan, Scott, Shelby, Spencer, Taylor, Trimble, Washington, Whitley, Wolfe and Woodford.