Blue Cross Blue Shield of North Carolina this month lowered its 2018 premium rate increase request for individual market policies. The revised request – 14.1 percent, down from 22.9 percent – comes after Blue Cross’s claims data show that the market is stabilizing and costs are getting under control.
Lost in this good news, however, was that the Trump administration is driving the entirety of Blue Cross’s premium hikes. Back in May, Blue Cross emphasized that the bulk of its anticipated 22.9 percent increase was due to losses in federal funding that the company would face if the Trump administration discontinued payments for cost-sharing reduction subsidies, lowering deductibles and co-pays for more than 300,000 North Carolinians who buy insurance on their own.
How much was this uncertainty driving Blue Cross’s premium hike? 14.1 percent – the exact figure of its lowered request announced this month. Blue Cross wanted to raise rates by another 8.8 percent to cover expected increases in medical costs and other expenses.
But since May, the company has seen lower-than-expected expenses on medical care, improving its financial picture for 2018. Blue Cross therefore dropped the smaller portion of its requested increase. While the medical expenses forecast has improved, the threat of nonpayment by the Trump administration remains.
Blue Cross Blue Shield would not need to increase next year’s premiums at all if not for the Trump administration’s actions.
The president has characterized cost-sharing reduction payments as a “bailout,” but these payments are money due to the insurance companies for discounts they’re required to provide by law. Without the reimbursement, someone has to pay, and many consumers won’t have the buffer of an increased tax credit. Congressional Republicans – who brought about this predicament by filing a lawsuit against the Obama administration – should come together with Democrats to appropriate funding.
If they keep playing politics, it’s their N.C. constituents who will literally pay the price.
Brendan Riley is a health policy analyst for the North Carolina Justice Center. Allison Rice is a Clinical Professor of Law and the director of the Health Justice Clinic at Duke Law School.