District of Columbia: 15.6% approved rate hike (nominal CSR factor)

Until now, it looked like the District of Columbia was gonna be hit with rate increases of at least 26% or more. However, it looks like the powers that be negotiated a much better deal, especially from CareFirst:

Washington, D.C. – The District of Columbia Department of Insurance, Securities and Banking (DISB) approved health insurance plan rates for the District of Columbia’s health insurance marketplace, DC Health Link, for plan year 2018.

Insurers filed their initial rates with the Department in May. Since then, DISB engaged in its rate review process resulting in two out of the four insurers revising their rates down from their initial filings, one as much as half of what was proposed. The Department also held a public hearing during the rate review process to allow residents to provide input in the rate review process.

“DISB completed a transparent, extended and rigorous rate review process to ensure District residents and small businesses are paying competitive prices for the plans offered by companies on the District’s health insurance marketplace,” said Commissioner Stephen C. Taylor. “The proposed 2018 health plan rates have been reviewed not only by the Department but also by District policyholders and consumer advocates via a public hearing to ensure that all viewpoints were considered before the process ended.”

The average increase in 2018 premiums across all insurers is 15.64% for individuals and 7.26% for small group plans. The same four major insurance companies as last year – Aetna, CareFirst BlueCross BlueShield, Kaiser Permanente and UnitedHealthcare – will have plans on DC Health Link. CareFirst and Kaiser Permanente plans cover individuals, families and small businesses for the 2018 plan year. Aetna and UnitedHealthcare plans are only available in the small business market.

Overall 177 plans were filed, up from 171 last year. There was no change in the number of small group plans 151, and individual plans increased from 20 to 26, including the new standard health savings account or HSA plans that will be available for 2018. HSA plans allow policyholders to set aside money on a pre-tax basis to pay for covered medical expenses if they have a high deductible health insurance plan.

Don't get me wrong, I'm not saying that a 15.6% rate increase is anything to cheer about, but it's a lot better than 26% or more. It's important to note that unlike most states, the Cost Sharing Reduction factor is fairly nominal for DC:

Since people earning up to 215% FPL are eligible for Medicaid in DC, only about 3% of their exchange enrollees receive CSR assistance anyway; and even among the 500 or so who do, they're only receiving around $650 in savings this year as opposed to the $2,700 - $3,200 in savings that lower-income CSR recipients receive everywhere else. So you're really talking about perhaps $400,000 in CSR cost for all of 2018 to be spread out among around 21,000 people on the individual market...or $19 per person for the whole year.

In other words, CSRs only make a difference of perhaps a tenth of a percent for DC; figure 15.7% vs 15.6%.