Next Big News Texas is expected to see the largest cuts to its individual insurance markets in two years.
The Texas Health and Human Services Commission has approved a plan to raise premiums on individual policies by $1,600 over three years starting in 2019.
The increase will take effect from June 1, 2019.
If the rate increases go through, Texas will see a 23 percent decrease in the number of insurers participating in the market.
That would be the biggest jump in insurance in the state’s history.
“If we do not have some type of relief, we’re going to see this massive decrease in enrollees,” said Bob Laughlin, executive director of the Texas Alliance for Health, a nonprofit that advocates for health care.
“We’re going a little bit lower than what we had in the previous year.”
Laughlin noted that in 2015, the state experienced the worst year-over-year drop in individual insurance coverage since 2009.
He said there are no plans to change the state Medicaid program.
Texas has the second-highest rate of uninsured in the country, behind California.
According to the Insurance Institute for Highway Safety, the average premium for a benchmark plan in the 2016-2017 state of Texas was $6,095.
This year’s premium is $2,937.50.
The average annual cost of a plan is $16,637 in Texas.
“It’s very expensive, and it’s not going to get any cheaper,” said Laughlin.
“The insurance industry is in a bit of a survival mode, but we’re in a very good place.”
Lubeck said the state is working on a plan for its Medicaid program to pay for the additional premiums.
“There’s a lot of questions about how much money is available for Medicaid,” he said.
“How much money will be available to pay out of pocket?”
The Texas Association of Insurance Commissioners also wants to lower premiums.
The association’s executive director, David P. Davis, said the group wants to raise the average monthly premium in Texas to $1.50 per month from the current rate of $1 per month.
Davis said that would bring the average per-month cost for a plan in Texas down from $1 in 2016 to $8 in 2019 and $10 in 2021.
“These are not unreasonable prices to pay,” Davis said.
Texas plans to expand Medicaid enrollment to cover more people.
In 2016, the Legislature approved $3 billion in federal funds for the expansion of Medicaid to all eligible low-income Texans.
That money would be used to expand access to coverage to about 120,000 Texans.
But that plan has not been fully implemented and has not generated a lot to pay the $1 billion in additional premiums that are coming, Davis said, adding that Texas plans on adding more people to the Medicaid rolls to cover additional people.
“For now, we are on pace for roughly 5 million more people who will become eligible to become eligible for Medicaid over the next five years,” Davis told Next Big Futures.
The state has also increased its unemployment insurance program to $15 per week for individuals who have been laid off.
Laughlin said he thinks the cost of covering workers who have lost their jobs to the recession is not high enough to justify the additional cost of the premium increase.
“People are going to have to look at the economic realities,” Laughlin told Next Blo.
“They’re going the extra mile to help cover the cost.”
The insurance industry will be closely watching the cost to Texas to see if any price increases are in the works.
“Our concerns are we’re at a point where the state of the individual market is not good enough,” said Scott Kranzl, a senior vice president at the National Association of Realtors.
“I think it’s going to be very hard to get this plan passed in Texas without significant price increases.”