(The Center Square) – Maryland residents who purchase insurance through the Maryland Health Benefit Exchange (MBHE) will see a 2.1% increase in their premiums this year, even though claims rose about 4.4%, according to Brad Boban, chief actuary for the Maryland Insurance Administration.
But it could have been worse if not for MBHE, which allows residents to file a waiver from the Centers of Medicare and Medicaid and purchase from the state program, Boban told the Health and Government Operations Committee. The state implemented the program in 2018 with a goal of reducing premiums by 30%.
“The waiver has achieved this goal,” Boban told the committee. “With the 2022 increase, the aggregate decrease since 2018 is 32% across all carriers.”
Currently, 220,000 Maryland residents are enrolled in the state program, up from 179,000 enrolled in the health exchanges in 2018, Boban said. Many of the new enrollees are younger and healthier, which also helps drive rates down, he said.
The COVID-19 pandemic had just a modest increase in rates.
“It pushed rates about 1% higher than they would have been in the absence of the pandemic," Boban said.
Many residents were not using their health care early in the pandemic for non-COVID-19 related reasons, which also kept rates down slightly at the time, Boban said.
No carriers on the Maryland health care exchanges charge a premium for tobacco users, but 42 other states do, said Maryland Insurance Commissioner Kathleen Birrane. Tobacco use is one of four permissible rating factors under the Affordable Care Act, she told the committee.
Maryland residents who self-reported a smoking habit of four or more times a week could see their premiums increase, while nonsmokers would see a decrease between one and two percent, Birrane said. The Maryland Insurance Administration must determine that charging a surcharge to smokers is “actuarially appropriate and justified,” she said.
Based on what insurance carriers are charging in other states, smokers could see a 5% to 25% surcharge. Two insurance carriers, UHC and Kaiser, charged a smoker’s surcharge before 2019 in Maryland, and the carriers currently charge one in states where it is permitted. CareFirst did not have a surcharge before and the insurance department does not expect it would add one.
The General Assembly could vote to cap the amount carriers could charge smokers. Boban said a tobacco surcharge could cause enrollment to decline slightly as some will not want to pay higher rates.