The Massachusetts Health Connector announced last week it would use the lower of two rate sets for some of its plans, but President Donald Trump’s decision hours later to end certain federal insurance subsidies means the Connector will use the higher rates after all.

With uncertainty still prevalent about the federal health care landscape, the Health Connector and Division of Insurance had prepared two sets of rates for its 2018 plans, including one featuring bigger rate increases that accounted for the possibility the federal government would stop making monthly payments to insurers known as cost-sharing reduction (CSR) payments.

Last Thursday, they announced they would use their standard rates – meaning an average premium increase of 10.5 percent for as many as 80,000 consumers – and form a contingency plan in case the CSR payments were cut off.

But a late-night announcement from the White House that same day brought word that Trump would end the payments. The Connector said Friday it would consider “alternative pathways” but officials announced Thursday they are uploading the higher rates.

The move to the higher rates – which will bring premium increases of about 26 percent to the affected members – was disclosed Thursday in a letter Gov. Charlie Baker sent to the state’s Congressional delegation, informing them of happenings at the Connector and asking them to support a bipartisan health care bill developed by Sens. Lamar Alexander and Patty Murray.

Baker wrote that the Connector “had delayed implementing its rates” for the 2018 plan year in hopes of Congressional action to authorize the subsidies and stabilize the insurance markets.

“However, the lack of affirmative congressional action requires the Connector to load into its system adjusted rates for open enrollment that take into account increased premiums to cover the loss of CSRs,” Baker wrote. “Today, the Connector will be loading these adjusted 2018 premiums, which are higher than 2017 rates by an average 18 percent above the expected 8 percent increase, into its system.”

The open enrollment period for 2018 begins on Nov. 1, less than two weeks away.

Baker said some Connector members “will be protected from these increases,” because of offsetting tax credits, but up to 80,000 people “are not eligible for premium tax credits and will face the full impact of these premium increases.”

The end of the CSR payments also “creates an unfunded liability of approximately $28 million for the remainder of the calendar year for carriers,” according to Baker, who said his administration is “committed to taking whatever steps are necessary to protect the stability of the health insurance market for 2017.”

Baker on Wednesday joined nine other governors on a letter to top U.S. House and Senate Republicans and Democrats, asking them to fund the CSR payments through 2019 and hold votes on the Alexander-Murray bill.

In Switch, State Health Exchange Will Post Steep Rate Increases

by State House News Service time to read: 2 min
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