A look at the proposed 2019 individual rates in Texas

Six carriers have filed their proposed rates for the individual market in Texas for 2019. Molina Healthcare, CHRISTUS Health Plan, Sendero Health Plan, SHA, Celtic Insurance Company, and Blue Cross Blue Shield of Texas have all submitted their rates, which are available on the SERFF website.

We have summaries of their proposed rate increases below. During open enrollment for 2018 plan years, Texas had over 1.1 million people sign up for coverage on the Exchange.

Molina Healthcare

Molina Healthcare has an average rate increase of 13.3 percent. Molina has nearly 237,000 members on the individual market in the state.

Molina specifically mentioned the individual mandate penalty being dropped to $0 for 2019 as one of the reasons for the rate increases. However, the one-year moratorium on the Health Insurer Fee for 2019 and the reduction in the federal corporate income tax helped prevent increases from being higher.

Molina’s proposed rates by region, metal tier and age can be viewed here.

CHRISTUS Health Plan

CHRISTUS has requested an average rate increase of 9.6 percent. CHRISTUS covers approximately 23,000 members on the individual market in Texas. According to its justification for the rate increase:

“The 2019 rate development reflects CHP’s expectations regarding increases in contractual reimbursement, changes in utilization of medical services and prescription drugs, and trends in drug costs per prescription.

Due to the uncertainty about the market environment that will exist at the time the proposed rates take effect, the rates include a 2% additional adjustment from 2018, for less tangible items, including non-enforcement of the individual mandate and reduced advertising and outreach.”

CHRISTUS also cites the change to the individual mandate as a reason for the rate increase, arguing that the “average morbidity of the single risk pool” will increase 2 percent.

While CHRISTUS’s average proposed rate increase is only 9.6 percent, one area has a rate increase of 26 percent for a gold plan.

Sendero Health Plan

While Sendero submitted rates, it may still withdraw from the individual market in 2019:

“The submission of these rates does not guarantee that Sendero will continue to participate in the individual market in 2019.”

Sendero has an average proposed increase of 33.8 percent.

Sendero mentions the recent changes in the marketplace as a reason for the rate increase:

“The increases calculated are primarily the result of trend, morbidity, changes to the expected risk adjustment payables, network normalization due to offering a narrow network product, changes in administrative fees, changes in taxes and fees, and changes in the overall expected covered population in the Texas individual market. Given that the rate changes are based on the same single risk pool, the rate changes vary by plan due to benefit changes and also the interaction of fixed dollar administrative cost PMPM amounts added during the rate build up.”

Sendero estimates it will have 25,000 members in the individual market in 2019.

SHA/FirstCare Health Plans

FirstCare has a proposed average rate increase of 19.9 percent, impacting approximately 17,000 members.

FirstCare provided several reasons for the increase, including an estimated 9.8 percent annual increase in health care cost. FirstCare also cites the elimination of the cost sharing reductions, the individual mandate, and changes to association health plans and short-term individual plans.

“These regulatory changes have the potential to remove healthier individuals from the ACA risk pool, raising the expense of covering those who remain.”

FirstCare also increased maximum out-of-pocket amounts and deductibles to prevent a larger rate increase. First Care’s proposed rates by region and age can be viewed here.

Celtic Insurance Company

Celtic’s Ambetter plan has a proposed rate increase of 4.7 percent. However, there are no supporting documents explaining the reason behind the rate increase or the breakdown of the rate increase by region, metal tier, or age available on the SERFF website yet.

Blue Cross Blue Shield of Texas

Similarly, BCBSTX does not have any supporting documents available on the SERFF website. BCBSTX has requested a 10.5 percent decrease. However, the Texas Department of Insurance has asked BCBSTX for clarification on their rate request:

“In the Rate Review Detail area, the prior average PMPM rate is listed as $585.42 and the requested average PMPM rate is $590.11. Please explain how this slight increase aligns with the stated -10.5% decrease in rates.”

This article has been updated to remove proprietary information originally included.