Arkansas health insurers ask for average 2% rate increases

Health insurers participating in the Arkansas Health Insurance Marketplace requested an average 2.08% increase for plan year 2020, Arkansas Insurance Commissioner Allen Kerr announced Monday (July 29).

The rate increases would apply to insurers participating in the Marketplace serving private citizens purchasing their own insurance, as well as those served by Arkansas Works, the state program that uses mostly federal Medicaid dollars to buy insurance for about 240,000 lower-income Arkansans.

The Arkansas Insurance Department has until September 18 to approve the requests, which are subject to an independent actuarial analysis.

Of the four insurers, Arkansas Blue Cross & Blue Shield requested the largest increase, 2.89%, for its 166,139 covered lives. Ambetter from AR Health & Wellness requested a 1.9% increase for its 67,959 covered lives. QCA Health Plan requested a .56% increase for its 18,935 covered lives. QualChoice Life and Health requested a .51% increase for 18,401 covered lives.

The increases are smaller this year than in recent years. Blue Cross received rate increases of 4.4% in 2019 and 14.2% in 2018. Ambetter received rate changes of 4.6% in plan year 2019 and 21.4% in plan year 2018. QCA Health Plan received increases of 1.59% in plan year 2019 and 24.47% in plan year 2018. QualChoice Life and Health received rate increases of 4.4% in 2019 and 14.2% in 2018.

The four insurers all cited the ending of a 1.25% exchange user fee as a factor in their request. That fee funded the Arkansas Health Insurance Marketplace when it was an independent entity. AHIM was returned to the Arkansas Insurance Department by Act 107 of 2019, which also ended the fee.

The four requests also cited the reduction in the federal government’s exchange user fee from 3% to 2.5%. The Centers for Medicare and Medicaid Services reduced that rate this year for state-based exchanges using the federal platform.

In the press release announcing the rate increase requests, Kerr said, “The initial 2.08% average increase requested shows the stability of Arkansas’ marketplace, the strength of the Governor’s Arkansas Works plan, and how placing AHIM under the control of AID led to the elimination of an unnecessary 1.25% marketplace fee paid by consumers and Arkansas taxpayers.”

Ray Hanley, president and chief executive officer of the Arkansas Foundation for Medical Care, a health policy and consulting organization, said the increase, “Makes one proud of Arkansas and all those who worked together to deliver among the lowest premium hikes in the nation.”

Open enrollment for participation in those insurance plans begins Nov. 1.