Of the 14 Wisconsin insurers offering coverage in the individual market, most expect premium reductions or modest increases for the 2021 plan year. That’s according to preliminary rate filings recently posted on the healthcare.gov rate review website
Based on these preliminary filings, 13 of the 14 insurers include plans offered on the health insurance exchange. For those insurers, 10 expect rate reductions ranging from a decrease of 1.39% for MercyCare HMO, Inc. and 12.89% decrease for Aspirus Arise Health Plan. The largest increase is 5.87% for Medica Community Health Plan. By contrast, four of the five insurers participating in Minnesota’s individual market filed rate increases for 2021, the largest at 7.12%.
Insurers are required to submit rates each year for review. Insurers submit an actuarial memorandum along with the rate filings, which allows for some insight into the rationale for the rate changes. A variety of factors go into the annual rate adjustments, and these can differ by insurer.
Some insurers, for example, included an adjustment factor related to COVID-19, while others indicated that no adjustment was made due to ongoing uncertainty around the virus. As a result of COVID and at the request of CMS, many providers stopped elective procedures earlier this year, and have since cautiously resumed those services. It is unclear what the long-term impact will be of that reduction in utilization as well as new means of providing services, such as telehealth.
One insurer indicated that there is an expectation that individuals who lost their job and thus employer-sponsored insurance could shift to coverage in the individual market. Others could shift to Medicaid coverage. These changes could impact the size and morbidity of their risk pool.
One plan’s filing summed up the difficulty in making projections due to COVID by saying that the potential range of best case and worst case outcomes of COVID-19 is volatile with little certainty about the reasonability of the underlying values.
A common theme identified in the rate filings was the impact of the state’s reinsurance program. Supported by WHA, a reinsurance program is intended to help offset high medical claims by covering part of an insurance claim once it surpasses a certain amount or by covering the claims for enrollees with certain high-cost medical conditions. Wisconsin’s reinsurance program was passed into Wisconsin law in 2017, approved by the federal government in 2019, and is effective through 2023.
Other factors affecting rates for 2021 included the repeal of the ACA insurer fee, return of risk corridor payments, medical cost and utilization. One insurer noted that while overall it expects a rate decrease, it factored in an assumed increase in the morbidity of the population due to the elimination of the individual mandate penalty and because association health plans and short-term plans have expanded. Presumably, as a result, the healthier individuals would leave the market, leaving a higher risk population.
Final rates were due to CMS August 26. CMS expects to post the final rates on their rate review website by November 2. Open enrollment for 2021 begins November 1, 2020.
Aspirus Arise Health Plan: -12.89%
Children’s Community Health Plan: -7.47%
Common Ground Healthcare Cooperative: -6.25%
Dean Health Plan: -2.27%
Group Health Cooperative of South Central Wisconsin: -6.81%
HealthPartners Insurance Company: -3.40%
Medica Community Health Plan: 5.87%
MercyCare HMO, Inc: -1.39 %
Molina Healthcare of Wisconsin, Inc.: -3.5%
Network Health Plan: 3.34%
Quartz Health Benefit Plans: 0.08%
Security Health Plan: 1.27%
Wisconsin Physician Svcs Insurance Corp: -14.78%*
WPS Health Plan, Inc.: -12.66%
*Not offering a plan on the insurance exchange