Craig Ey, 410-468-2488 (O)
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The Maryland Insurance Administration Approves Amended 2018 Premium Rates for Silver On-Exchange Plans Sold in the Individual Market

Consumers Encouraged to Shop during Open Enrollment Period Starting November 1

BALTIMORE – The Maryland Insurance Administration (MIA) today announced approved amended premium rates for specific individual health insurance plans to be offered in the state for coverage beginning January 1, 2018. This announcement only impacts those Marylanders who purchase Silver plans in the individual health insurance market through the Maryland Health Connection (“Exchange”). Approximately 96,000 Marylanders are projected to be enrolled in Silver plans on the Exchange from CareFirst and Kaiser in 2018.

The MIA reopened rates for individual market plans on Monday, October 16th as a result of the announcement that federal cost-sharing reduction (CSR) reimbursements would no longer be paid to carriers for 2018. Rates originally approved by the MIA on August 25, 2017 presumed that CSR reimbursements would continue for 2018, consistent with federal law. As a result of this change, the MIA’s rate approvals from August were no longer consistent with Maryland law, which mandates that rates must be adequate, cannot be discriminatory nor can rates be excessive.

The MIA took the approach of “Silver loading” premium increases onto on-Exchange Silver plans (with slightly enhanced benefits) to account for unpaid CSR reimbursements. This approach maximizes the advanced premium tax credits (APTCs) for eligible consumers. The APTC will increase due to the increased premium rates. The increase in APTCs will largely offset the impact of this rate increase for many APTC-eligible consumers. For those on-Exchange Silver consumers ineligible for APTCs, please note that carriers will not be changing the premium rates or benefits for their off-Exchange Silver plans so they may avoid the rate increase altogether by moving to off-Exchange Silver. Finally, any consumer receiving any APTC without a material CSR amount (including no CSR amount) is strongly encouraged to consider off-Exchange Silver plans and other metals (e.g., Bronze, Gold, etc.) for their best value, weighing both premium and insured cost-share, since the landscape has changed considerably.
If CSR reimbursement payments resume, the MIA expects that carriers will employ a mechanism to make whole the consumers who pay more in premium as a result of the approved amended rate increases.

To assist the Administration in making its rate decision, MIA actuaries reviewed the data, methodologies, and assumptions companies used to develop their proposed amended rates. An independent third party, Oliver Wyman, also conducted an actuarial analysis of the requested amended rate increases. On Monday, October 23rd, the MIA held a public hearing to receive input from stakeholders on the amended premium rates.
Today’s announcement is not expected to impact the 2018 Open Enrollment time frame. Open enrollment is still scheduled to run from November 1, 2017 through December 15, 2017. Marylanders are encouraged to shop rates and may sign up for new plans or renew existing ones during the open enrollment period. All enrollees who are currently enrolled in an on-Exchange Silver plan, are encouraged to shop different metal coverage levels through the Exchange, or solicit an off-Exchange Silver plan through a producer or by a direct request to a carrier.

The MIA has approved the following amended rate increases* for the Silver On-Exchange plans:
​Silver On-Exchange Only ​CareFirst Blue Choice, Inc. ​First of Maryland, Inc. and Group Hospitalization and Medical Services, Inc. (both CareFirst Companies)​ ​Kaiser Foundation Health Plan of the Mid-Atlantic States, Inc.​ Total​​
T​ype of Network​ ​HMO ​PPO ​HMO
Projected Total Members in Silver On-Exchange for 2018​ ​51,490 ​2,814 ​41,199 95,503
​ Original Avg. Rate Increase Requested (5/1/17)​​ ​43.6% ​55.6% ​23.4%
Original Avg. Rate Increase Approved (8/25/17)​​ ​31.4% ​52.1% ​22.7%
​Amended Rate Increase Requested (10/16/17) ​60.1% ​86.1% ​33.3%
​Approved Amended Rate Increase (10/24/17) ​58.2% ​76.0% ​43.4%**
*Marylanders in Gold, Platinum, Young Adult/Catastrophic or Bronze plans either on-Exchange or off-Exchange, or Marylanders purchasing Silver plans off-Exchange will not be impacted by these additional rate increases.
**Kaiser’s original amended rate increase filing was later refiled at a higher rate to account for membership migration out of Silver on-Exchange plans by members that do not receive material CSRs. Rates were also adjusted to account for components of operating expenses that vary with premium (e.g., premium tax). Importantly and incidentally, the MIA expects that Kaiser’s amended Silver on-Exchange rates will have the net effect of benefiting consumers, because Kaiser has the second-lowest cost Silver plan (for most of Maryland) upon which the federal APTC amount is calculated for the market. Inside Kaiser’s service area (which represents 85% of Maryland’s population), the higher the premium of this plan, the higher the APTC will be for all APTC-eligible consumers, in all plans in the service area. Outside Kaiser’s service area, the APTC will be solely dependent on CareFirst’s rates. Those consumers with on-Exchange Silver plans that are ineligible for CSRs and receiving little or no APTC will still have the option of purchasing off-Exchange Silver plans at the rate approved by the MIA in August, thereby avoiding the amended rate increase altogether. In general, anyone for whom the cost of Silver on-Exchange coverage is excessive, even with applicable subsidies, is strongly encouraged to consult a licensed insurance producer and shop other metals (e.g., Bronze, Gold, etc.) for their best value weighing both premium and insured cost-share since the landscape has changed considerably.
The carriers had requested the following rate increases for all metal plans:
​ALL METALS (On & Off Exchange) ​CareFirst Blue Choice, Inc.​ ​CareFirst of Maryland, Inc. and Group Hospitalization and Medical Services, Inc. (both CareFirst companies) Kaiser Foundation Health Plan of the Mid-Atlantic States, Inc.​​ ​Total
Type of Network​​ ​HMO ​PPO ​HMO
Members in All Metal Plans as of 3/31/17​ ​158,835 ​24,410 ​59,522 242,767
Original Avg. Rate Increase Requested (5/1/17)​ ​50.4% ​58.8% ​23.4%
​Original Avg. Rate Increase Approved (8/25/17) ​34.5% ​49.9% ​22.6%
​Amended Rate Increase Request (10/16/17)​ ​46.2% ​55.2% ​29.6%
Approved Amended Rate Increase (10/24/17)​​ ​45.3% ​53.6% ​36.3%
Summaries of each rate decision are available on the MIA’s rate review website at www.HealthRates.mdinsurance.state.md.us. Sample approved 2018 premium rates for all companies by geographic region also are available on that website. The sample rates do not reflect any employer contribution, any financial assistance a consumer may receive to reduce premiums or cost-sharing for plans purchased through the State’s health insurance marketplace, www.MarylandHealthConnection.gov.
Related Links:

• Approved 2018 Rates, by Carrier
• Examples of Approved Rates, by Region
• FAQs on the Rate Review Process
• Oliver Wyman Letter
About the Maryland Insurance Administration
The Insurance Administration is an independent State agency charged with regulating Maryland’s $28.5 billion insurance industry. For more information about the Insurance Administration, please visit www.insurance.maryland.gov or follow us on Facebook at www.facebook.com/MDInsuranceAdmin or Twitter at @MD_Insurance.