Insurers seek 17% hike in state marketplace premiums, amid ‘wild uncertainty' at federal level

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3 days ago

Nearly 300,000 Marylanders who bought individual plans on the Maryland Health Benefit Exchange could be affected by proposed premium rate increases. (Photo by Danielle J. Brown/Maryland Matters.)
State insurance officials warn that thousands of Marylanders who bought health insurance on the state marketplace could see the cost of coverage increase an average of 17% next year unless Congress extends federal subsidies that are set to expire in December.
The Maryland Insurance Administration (MIA) said in a press release Tuesday that health insurers are asking the state to raise premiums between 8.1% and 18.7% for individual plans offered under the Affordable Care Act for 2026. The increase would hit nearly 300,000 Marylanders who buy their health insurance through the state marketplace.
Insurers say the rate increases are needed to account for the impending expiration of federal insurance premium tax credits under the Affordable Care Act that are set to expire at the end of the year. If the tax credit remained, insurers would only be seeking 'an overall average rate change of 7.9%, with most carriers filing for an increase between 5% and 7%,' the MIA statement said.
The tax credit expiration is just one of the changes under discussion at the federal level that state officials fear could upend Maryland's insurance marketplace and lead to higher premium costs.
Maryland Insurance Commissioner Marie Grant said the budget reconciliation bill recently passed by the House of Representatives could lead further increases insurance premiums and make it harder to enroll in an ACA individual plan.
'There are many changes in the House budget reconciliation bill on the federal level that will impact the ability of Marylanders to … enroll in our exchange, as well changes in the calculations that would lower the amount of tax credits further for Marylanders,' Grant said in a virtual press conference Tuesday.
The insurers are also asking for premium increases for small group plans with an 'overall average rate increase of 5.5%, with the averages by carrier ranging from 3.3% to 12.2%,' according to the MIA press release, though state officials were more focused on the increases in the individual market Tuesday.
The House narrowly passed the so-called 'One Big Beautiful Bill' last month to carry out much of the Trump administration's policy plans, including massive changes to Medicaid and the ACA. The current bill does not include language to extend the premium tax credit, leaving it to expire in December unless the U.S. Senate decides to extend it.
That 'wild uncertainty' at the federal level is driving the need for rate increase requests by Maryland's insurance companies, said Matthew Celentano, executive director of the League of Life & Health Insurers of Maryland, which includes major providers such as CareFirst, Kaiser Permanente and UnitedHealthCare.
'The budget reconciliation package that passed the House of Representatives last week would have dramatic impacts on Maryland insurance markets, and the loss of subsidies would create affordability challenges across the board for Maryland consumers that would lead to a reversal of progress over the years to drastically reduce the number of uninsured Marylanders,' Celentano said in a written statement.
'We hope that the Senate realizes and reverses course on the negative consequences of reducing premium tax credits and the concerning impacts it will have on the entire health care ecosystem including our most vulnerable neighbors,' his statement said.
Grant said the proposed premium rate increases are not final and will go through a 'really careful review' by MIA, with public hearings and public comments over the next couple months before new rates are set for next year.
But legislators and state officials say that the potential expiration of premium tax credits is just the tip of the possible impacts on the insurance market from the federal level.
'We don't know at this point the exact impact on Marylanders of all those changes, but I think that we can anticipate that they could further lower subsidies and further lead to increases in the market, if they are not addressed by the Senate,' Grant said.
Michele Eberle, executive director of the Maryland Health Benefit Exchange, said that one of the proposals in the House bill would cut a month off the open enrollment period when people shop around for health care plans – running from Nov. 1 to Dec. 15, instead of through Jan. 15. Eberle noted that many young people who enroll in private health plans tend to enroll in the later weeks of the current open enrollment period.
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'We know that younger, healthier people in the risk pool is good for everyone, as it lowers the rates,' she said.
Eberle said that some provisions in the reconciliation bill would also reduce the state's ability to automatically re-enroll individuals by requiring more upfront eligibility checks. Other language in the bill would prohibit tax credits for many undocumented individuals who are lawfully present, including those with asylum protections.
'The collective impact of these changes will not only destabilize the private health insurance market place, but we anticipate we could go back to pre-pandemic levels of enrollment – a loss of about 30% of our enrollees,' Eberle said.
Rep. Steny Hoyer (D-5th) said during the virtual press conference that the current bill language will 'skyrocket prices for average working people,' calling the One Big Beautiful bill is 'one big, brazen betrayal of working Marylanders and Americans.'
In the 2025 General Assembly session, lawmakers passed legislation aiming to mitigate potential disruptions in the state marketplace due to federal decisions.
Among those was a proposal to give the Maryland Health Benefit Exchange authority to create a state subsidy if the federal premium tax credit comes to an end. That authority would only be available for 2026 through 2028 under this law sponsored by Del. Joseline A. Pena-Melnyk (D-Prince George's and Anne Arundel), chair of the House Health and Government Operations Committee.
Sen. Pam Beidle (D-Anne Arundel), chair of the Maryland Senate Finance Committee, fears the changes will take a toll on the state's relatively low 6% uninsurance rate for health care, backsliding on legislative efforts to boost insurance coverage across the state.
'To me, health care is like food and water. It's one of the most important benefits we can provide to people,' Beidle said. 'Seeing the changes this bill (budget reconciliation bill) will bring … we've seen our numbers go down to where it's just a small percentage of people who don't have health insurance, and now we're going to see that number increase exponentially,' she said.