North Carolina Insurer Seeks 23 Percent Rate Hike, Blames Congress

North Carolina's largest health insurer said Thursday it wants to increase the average price for heavily subsidized policies created by former President Barack Obama's overhaul law by 22.9 percent next year, a double-digit increase it blames mostly on Congress.

Blue Cross and Blue Shield of North Carolina said two-thirds of its rate increase is because Congress isn't funding promised subsidies that provide consumers with extra financial help for out-of-pocket costs like deductibles and copayments.

If the Republican-led Congress fully funded the so-called "cost sharing reductions," the insurer's rate increase for individual plans that comply with the Affordable Care Act would be the lowest in the past four years at 8.8 percent, Blue Cross pricing executive Brian Tajlili said. And while buyers are older and sicker, that trend is slowing and allowing insurance prices to stabilize, Tajlili said.

"That was the expectation was from the beginning" of the law, he said, "that at some point it would reach the state where it would not be so volatile every year."

Blue Cross said more than three-quarters of its ACA customers this year bought silver-level plans that qualify for the cost-sharing reductions that are tied to a consumer's income. A family of four earning $40,000 would save about $2,800 a year on deductibles with the reductions, Blue Cross said. Without the federal subsidy, all ACA premiums must increase, Tajlili said.

Congressional Republicans sued the Obama Administration to stop the subsidies, and that case is now tied up in court. President Donald Trump's administration has sent mixed signals over how it will pursue the case or whether the payments will continue.

The Durham-based company is the only insurer offering ACA policies in 95 out of North Carolina's 100 counties this year. It's unclear whether that dominant position would be challenged by competitors in 2018.

Cigna is the only other insurer selling ACA policies in North Carolina this year, but confines its business to five counties near Raleigh. The company wants an average 31.9 percent rate increase in 2018 affecting about 21,000 customers, according to a filing last week with state regulators that was obtained by The Associated Press. Blue Cross has more than 500,000 ACA customers.

Cigna's "pricing reflects market conditions and underlying economics," company spokesman Joe Mondy wrote in an email. "Our 2018 rate filings are based on our customers' historical claims experience, expected medical costs trends, product changes, overall market performance, along with the evolving rules, regulations and design of the marketplace."

Blue Cross has sought double-digit rate increases since the first year ACA-compliant insurance plans began being sold on a federal marketplace in 2014. The company increased prices by an average of 24 percent this year, 32.5 percent in 2016 and 13.5 percent in 2015.

On Wednesday, the Trump administration released a report that found a doubling of average premiums for individually purchased coverage from 2013, before Obama's statute took effect, to this year. Premiums in the 39 states including North Carolina served by the online health insurance marketplace increased from an average of $224 a month in 2013 to $476 in 2017, the report from the U.S. Health and Human Services Department said.

Before 2013, insurers were allowed to turn away people with health problems, and there was no federal requirement for a standard benefits package. Those two changes made coverage more substantial, but also increased the cost.