Marylanders will pay lower rates to buy health insurance on the individual market next year after a month-long effort to avoid sharp rates increases.
Gov. Larry Hogan and state Insurance Commissioner Al Redmer Jr. touted the lower rates Friday morning in Annapolis after the Maryland Insurance Administration approved the lower rates for plans offered on the state’s exchange.
The exchange sells insurance for roughly 200,000 Marylanders who do not receive health insurance coverage through an employer.
“We decided to address the crisis head-on in Maryland by working together in a bipartisan way,” Hogan said. “We have made real progress toward solving our state’s healthcare challenges.”
Hogan, a Republican, worked with the Democratic-led General Assembly this year to pass a bill that kept in place a tax on insurance carriers that Congress had eliminated at the federal level. The money from the tax is used for a reinsurance program that creates a pool of money for insurers to help cover the most expensive claims.
Hogan said the program is the largest of its kind in the country and could serve as a model for other states.
That reinsurance plan was approved by the federal government, prompting insurance companies to revise their rate requests for 2019.
The insurance companies that sell individual health plans — CareFirst and Kaiser Permanente — initially requested average rate increases that ranged from 18.5 percent to 91.4 percent, depending on the type of plan.
Now the rates are decreasing by between 7.4 percent and 17 percent, Hogan announced Friday.
The new rates were officially approved by the Maryland Insurance Administration following a public hearing on Monday.
“There is no doubt that this is — after years of increases — positive news for those seeking individual coverage in Maryland,” CareFirst President and CEO Brian D. Pienick said in a statement.
CareFirst said customers who were in a preferred provider option plan may be able to switch to similar health maintenance organization coverage at a lower rate, and would advertise the option in advance of the enrollment season that begins Nov. 1.
CareFirst is reducing the rate on its HMO by 17 percent, while rates on the PPO will decline 11.1 percent. It had been seeking increases of 18.5 percent on the HMO and 91.4 percent on the PPO.
Kaiser, which had sought a 37.4 percent increase for its HMO, now will reduce that rate by 7.4 percent.
Hogan and Redmer portrayed the process as standing up to help Marylanders in the face of dysfunction at the federal level.