If Congress fails to extend the discounts that significantly lower the amount of money Obamacare customers spend on their health care, Affordable Care Act premiums in South Carolina may jump by more than 33 percent next year, new federal data shows.
The hike, which was proposed by BlueCross BlueShield of South Carolina, hasn't been approved by the state Department of Insurance.
But if it is cleared, Charleston insurance agent Josh Dickerson predicts adults and families with average income who buy insurance through healthcare.gov will suffer most.
"Basically, it’s going to hit the middle class worse than anyone," Dickerson said.
BlueCross BlueShield is currently the only company that sells Affordable Care Act plans in South Carolina, and the company's proposed increase reflects broader industry unease. Insurers have been shaken by repeated attempts to repeal and replace the federal law, as well as recent threats made by President Donald Trump on Twitter to suspend the "cost-sharing reductions," or "CSRs," which make policies on the federal marketplace more affordable for low-income customers.
All the uncertainty has made it difficult for companies to price their plans for 2018 not knowing what the health care law will look like next year or if it will continue to exist. All proposed rates and plans were due in late June but the average rate increases were only made public Tuesday.
"To remain as the lone health insurer in the South Carolina public exchange market BlueCross BlueShield of South Carolina had to factor in the volatility of the marketplace, most expressly the continuing uncertainty of government funding of cost sharing reduction to insurers," Patti Embry-Tautenhan, a spokeswoman for the insurance company, said in a prepared statement.
Health insurance prices will vary based on each plan's benefits, as well as the customer's age and address, she said. But most people who qualify for financial aid through healthcare.gov "will see an average increase of $12 or less in their premium" each month if the 33.4 percent rate increase goes through, she said.
Kim McQuillin, 33, who lives on Daniel Island, will pay much more than an extra $12 per month if the proposed rate is approved. Last year she paid $655 a month to insure herself and her two children through the federal marketplace. But when her husband, a lawyer and Berkeley County School Board member, was named a partner at the law firm where he works, he lost his employer-sponsored health insurance plan. The family added him to their Affordable Care Act policy in January and their premiums ballooned to $1,250 a month.
The McQuillins don't qualify for any financial aid because their income is too high, and their premiums will top $1,600 a month next year if the Department of Insurance signs off on the rate increase.
"Our health care and our mortgage, those are the two biggest payments we make each month," McQuillin said. "It’s not affordable. It’s scary, actually."
Insurance companies in other states, including BlueCross BlueShield of Tennessee and Anthem in New Hampshire, have also proposed double-digit rate increases. Nearby in North Carolina, Blue Cross NC proposed hiking its Obamacare premiums by nearly 23 percent next year but said in a press release the "requested increase would have been 8.8 percent if CSR subsidies had been fully funded for 2018." News outlets reported Wednesday the North Carolina company's proposed rate increase had been adjusted to 14.1 percent.
S.C. Department of Insurance Director Ray Farmer said Affordable Care Act premiums in South Carolina will not increase by 33.4 percent next year if Congress votes to extend those CSR payments.
"It could be a less dramatic increase," Farmer said. "It begs Congress to address the issue."
For now, the cost-sharing reductions, which cost about $7 billion a year, are renewed on a monthly basis, and the Trump administration has not yet guaranteed that the federal government will fund them for August. More than 183,000 South Carolinians are covered by Affordable Care Act policies and about 131,000 of them qualify for both premium assistance and the cost-sharing reductions.
A panel of federal appeals judges in Washington decided Tuesday that states can defend the legality of the CSR program. Because of the ruling, legal experts said, states can now sue if the Trump administration decides to stop paying the money.
Farmer said he isn't familiar with the ruling and didn't know if South Carolina would join such a lawsuit.
"I would hope it wouldn’t get to that," he said.
The final rates for Affordable Care Act plans in South Carolina will be released by the Department of Insurance in late September or early October, Farmer said. Enrollment on healthcare.gov opens Nov. 1.