Latest news with #SabrinaCorlette
The Independent
10 hours ago
- Business
- The Independent
Tariffs are already making your health insurance costs go up
Health insurance companies have begun informing states that tariffs will result in premium increases for individual and small group market enrollees in 2026. This comes amid congressional considerations of cuts to Medicaid and the expectation that they will end enhanced subsidies for the Affordable Care Act, known as Obamacare. A research professor at the Center on Health Insurance Reforms at Georgetown, Sabrina Corlette, told Axios that there's a 'perfect storm of factors that are driving prices up.' Health insurance companies calculate their premiums ahead of each year, basing them on the expected prices and demand for goods and services. President Donald Trump's tariffs are expected to increase the prices of prescription drugs, medical devices, and other medical products and services. Some of those costs will eventually be paid by those enrolling in health coverage. Several health insurance companies responsible for plans for individuals and small groups have informed state regulators that tariffs are prompting them to raise premiums more than they would have otherwise for next year, according to Matt McGough, a KFF policy analyst. In a filing last month, the Independent Health Benefits Corporation told regulators in New York that it is set to raise premiums for its individual market enrollees 38.4 percent in 2026. Independent Health spokesperson Frank Sava told Axios that roughly three percent of that is directly due to tariffs, according to projections on how much tariffs are expected to increase the prices of drugs and the use of imported drugs. UnitedHealthcare of Oregon revealed in a filing that almost three percent of its planned 19.8 percent premium increase for small group enrollees next year is due to uncertainty about tariffs, specifically regarding how they're expected to affect pharmaceutical prices. McGough told the outlet that insurers 'don't have any historical precedent or data to project what this is going to mean for their business and health costs.' 'I think it really makes sense that they're trying to hedge their bets,' he added. While Trump has yet to put in place pharmaceutical tariffs, he told reporters Monday that they would be arriving 'very soon.' Insurers typically sign reimbursement contracts with hospitals that last several years; however, hospitals can request renegotiation if their costs increase due to tariffs, Corlette noted. Insurers are unable to change their premiums during the year. However, if health plans exceed their premium estimates in rate filings, they must reimburse enrollees the difference. Insurers have no way to compensate for unplanned costs afterwards. At the same time, some insurers have indicated that they're reviewing the effects of the tariffs, but they're not increasing their premiums because of them as of this time. "There is uncertainty around inflation and the economy due to possible tariffs however we did [not] put anything for this in this filing," Kaiser Foundation Health of the Northwest said in a report to the state of Oregon. McGough noted that state regulators can push back against the premium calculations put forward by insurers before they're made final. Insurers must disclose their 2026 Affordable Care Act marketplace plan rates to federal regulators by July 16. Proposed rates will be shared by August 1.
Axios
17 hours ago
- Business
- Axios
Tariffs drive some health plans to hike premiums
Health insurers are starting to notify states that tariffs will drive up the premiums they plan to charge individual and small group market enrollees next year. Why it matters: The Trump administration's trade policy is adding another layer of uncertainty for health costs as Congress considers Medicaid cuts and is expected to sunset enhanced subsidies for Affordable Care Act coverage. "There are sort of a perfect storm of factors that are driving prices up," said Sabrina Corlette, research professor at Georgetown's Center on Health Insurance Reforms. The big picture: Health insurers calculate monthly premiums in advance of each year based on the expected price of goods and services and projected demand for them. Tariffs announced by President Trump are expected to drive up the cost of prescription drugs, medical devices and other medical products and services. Some of that difference ultimately would be passed down to enrollees. Where it stands: A handful of health insurers administering individual and small group plans have already explicitly told state regulators that tariffs are forcing plans to raise enrollee premiums more than they otherwise would next year, KFF policy analyst Matt McGough wrote in an analysis published Monday. Independent Health Benefits Corporation told New York regulators in a filing last month that it plans to raise premiums for its individual market enrollees 38.4% next year. About 3% of that is directly due to tariffs, based on projections of how much they'll increase drug prices and the use of imported drugs, Frank Sava, a spokesperson for Independent Health, told Axios. Similarly, UnitedHealthcare of Oregon said in a filing that nearly 3% of its planned 19.8% premium increase for small group enrollees next year is due to uncertainty around tariffs, particularly on how they'll affect pharmaceutical prices. Insurers "don't have any historical precedent or data to project what this is going to mean for their business and health costs," McGough said to Axios. "I think it really makes sense that they're trying to hedge their bets." Trump hasn't implemented sector-specific tariffs on pharmaceuticals yet but told reporters Monday that they'd come "very soon." Insurers typically sign multiyear reimbursement contracts with hospitals, but hospitals could ask to renegotiate if their costs skyrocket because of tariffs, Corlette said. Insurers can't change their premiums throughout the year. But if health plans do overshoot their premium estimates in rate filings, they have to pay enrollees back the difference in rebates. While there may be a competitive advantage to keeping premiums lower, there isn't really a way for insurers to make up for extra unplanned costs after the fact. Yes, but: Some insurers indicated that while they're keeping a close eye on tariff-related impacts, they aren't baking them into their premium rates yet. "There is uncertainty around inflation and the economy due to possible tariffs however we did [not] put anything for this in this filing," Kaiser Foundation Health Plan of the Northwest's report to Oregon reads. State regulators can also push back on insurers' premium calculations before they're finalized, McGough noted. What we're watching: While some states have earlier deadlines, insurers have to submit their 2026 ACA marketplace plan rates to the federal regulators by July 16, and proposed rates will be posted by August 1.
Axios
05-02-2025
- Health
- Axios
Indiana among states cranking up oversight of health insurers
Mounting public anger over health insurance is leading more state legislatures to eye tighter oversight of the industry, including its use of AI to screen claims and issue denials. Why it matters: While congressional scrutiny has picked up, states remain the primary regulators of health insurance and are best positioned to address access to and adequacy of care. The big picture: States have already been targeting prior authorization and other tools health plans use to manage health care use, with more than 90 different bills proposed nationwide last year, according to Georgetown University's Center on Health Insurance Reforms. The killing of UnitedHealthcare CEO Brian Thompson revealed widespread anger over insurer decisions. The calls for action are being amplified by physicians and other longtime insurer antagonists. "With both sorts of pressures pushing on [state] legislators to take some action, I do think we're likely to see more bills advance in the 2025 legislative session," said Sabrina Corlette, co-director of Georgetown's center. Zoom in: After several years spent focused on health care costs, Indiana lawmakers convened a task force in 2023. The group's recommendations focused on increased transparency across the industry and standardizing prior authorization. This session, bills to increase oversight of pharmacy benefit managers and restrict the use of prior authorization by insurers are moving. Yes, but: A bill that would require a health care provider or insurer to disclose the use of artificial intelligence to make or inform any decision involved in the provision of health care or coverage has yet to be heard. There's one more week for House Bill 1620 to be considered before the House's deadline for bills to move out of committee. Between the lines: State efforts to oversee health insurers are expected to outpace those in the new Congress, in part because legislators tend to face less pressure covering the costs of changes in insurance law. The Trump administration and Republican Congress also aren't expected to make insurance reforms key parts of their early policy agenda. The latest: California has already prohibited the use of AI for coverage denials, and Bloomberg Law reported that lawmakers in Georgia, New York and Pennsylvania are vowing to bring up the issue this year. The other side: The insurance industry has said the use of AI can improve customer experiences, speed the claims process and detect fraud.
