Justin W Dennis, Adobe Stock
Insurance rates on the federal health care exchange are expected to increase by 39 percent in Utah in 2018, according to data released Thursday by the Utah Insurance Department.

SALT LAKE CITY — Insurance rates on the individual federal health care exchange in Utah are expected to increase by 39 percent in 2018, according to data released Thursday by the Utah Insurance Department.

The insurance rate increase can be explained by the expanding cost of health care itself, as well as carriers' uncertainty over whether the Trump administration will continue to put money into what are called cost-sharing reduction payments, said Steve Gooch, spokesman for the Utah Insurance Department.

"Just the general increase in medical trends that we've seen over the past decade — as the cost of services increase, premiums increase," Gooch said. "There's (also) an increase due to the uncertainty over whether the (cost-sharing payments) will be funded. So that causes some uncertainty in the risk profile, so that's kind of built into those (new) rates."

In Salt Lake County, the rate increase in 2018 will be 33.6 percent, according to the Utah Health Policy Project, which functions as an insurance think tank as well as a federal exchange enrollment hub.

Though often referred to interchangeably, rates are different from premiums. Based on rates, premiums are the monthly cost passed on to a consumer, after adjustments made for their age, where they live and other factors.

Roughly 86 percent of Utahns who get individual insurance on the exchange can expect to receive federal subsidies on their monthly premiums in 2018 that "will reduce to eliminate these rate increases," Utah Health Policy Project spokesman Jason Stevenson said in a statement.

Stevenson told the Deseret News earlier this month that federal subsidies cover 72 percent of monthly premiums on average.

The Utah Health Policy Project said in a release that "today’s announcement is not unexpected for several key reasons and does not mean that Utah consumers can expect to see similar increases in their actual health insurance premiums."

It was also confirmed Thursday that University of Utah Health Plans will be offering plans in all 29 counties in Utah beginning next year, compared to 16 counties now.

"We're excited to be able to offer coverage to residents north, south, east and west," University of Utah Health Plans CEO Chad Westover said. "We think we have a great network we contract with, obviously the University of Utah, but also with Mountain Star hospitals and facilities statewide, (and I) think the network that we have actually includes over 6,000 providers."

Gooch said the University of Utah Health Plans' expansion is "good for the market and good for Utahns."

"It's great. We're very pleased that more Utahns in different areas of Utah are able to have some choice and that there's some competition in those areas," he said.

Molina Healthcare announced in August that it would stop offering plans on the federal exchange in Utah beginning next year. The company has been serving seven counties. Molina leaving the exchange means 70,500 Utahns will need to find other health insurance options for 2018.

Molina's retreat and University of Utah Health Plans' expansion mean every county in Utah will have two insurers to choose from on the exchange in 2018. SelectHealth is the other insurer offering plans statewide.

University of Utah Health Plans' analysis of the federal exchange in Utah finds there is plenty of reason to be optimistic it will be "sustainable" long term, Westover said.

"I think the future is good for the Utah exchange," he said, noting there is a "misperception of the market" in part because "those who are leaving seem to get a lot of attention" as opposed to those holding steady or expanding their presence.

Open enrollment on the exchange opens Nov. 1 and ends Dec. 15, concluding several weeks earlier than the previous enrollment period. Gooch issued a caution for Utahns who have plans on the federal exchange, saying that the terms of their coverage do not remain identical from year to year and that it's important to review upcoming changes before deciding.

"One thing people need to keep in mind is that plans are changing in a lot of cases, so people will want to go shopping," he said. "Looking on healthcare.gov and finding something that can meet your needs is a good idea."

Federal uncertainty

Citing an analysis from the American Academy of Actuaries, Stevenson said that 20 percentage points of the increase in insurance rates can be directly tied to uncertainty surrounding whether the federal government will come through with cost-sharing reduction payments.

"It is important to note that over half of this rate increase is due to the continued political games that lawmakers are playing in Washington, D.C., instead of sitting down to work together to stabilize the marketplace and protect Utah families,” he said.

Because of uncertainty over those federal payments, the Utah Insurance Department instructed carriers to prepare 2018 rates for a scenario in which those payments come and a scenario in which they don't, Westover said.

"There's an approximately 30 percent difference in those two rates," he said, and the ones published Thursday assume that no cost-sharing payments will be received next year.

"The (Utah Insurance Department) ... asked us to file assuming the cost-sharing subsidies are not funded going forward," Westover added.

Asked whether carriers would still have time to put forward their lower rates if the federal government commits to dispensing cost sharing reduction payments through the end of next year, he said "that flexibility would have to come from" the Centers for Medicare and Medicaid Services.

Cost-sharing reduction payments were designed to reimburse insurers on the federal health exchange that was set up under the Affordable Care Act, protecting them against financial losses they incur by keeping co-insurance rates and deductibles low. The federal government dispersed $7 billion in such payments last year.