In Arizona rate review filings, Cigna Healthcare of Arizona proposed an 18.2 percent on-average rate reduction for individual products it plans to offer in 2019.
The insurer returns to the Arizona market after offering individual/family exchange plans in 2014, 2015 and 2016. Cigna dropped out of the 2017 market, leaving only two participating carriers: Health Net (Centene) and Blue Cross Blue Shield Arizona (BCBSAZ)
This year, BCBSAZ offers 36 plans across four metal levels in Arizona; catastrophic (8) , bronze (16), silver (8) and gold (8). Health Net offers 13 plans across three metal levels; bronze (3), silver (8) and gold (2).
New insurers expected to sell on the individual market are Bright Health and Oscar – as new plans to the market, their rate filings won’t be available for public view until after October 15.
The Arizona Department of Insurance received threshold rate increase filings (increases of 15% or more for at least one plan) for BCBSAZ for individual market plans and Banner Health and Aetna Insurance Company for its small group products.
Health Net of Arizona and BCBSAZ rate review submissions for 2019 included a few new details.
- Health Net filed a -5.38 percent rate reduction and said it will offer four new plans in Maricopa county and four new plans in Pima county, but no catastrophic coverage.
- BCBSAZ filed an average rate increase of 0.2 percent, varying between -14.2 and 41.6 percent. The insurer plans to offer 66 exchange plans, including 11 new catastrophic plans and will continue to serve rural Arizona.
Last year, nearly 166,000 Arizona consumers enrolled in a 2018 exchange product offered on the Health Insurance Marketplace.
According to Cigna’s filing, the following factors are the main drivers of its proposed 18.2 percent rate decrease in 2019:
• Medical inflation and unit cost changes of medical services year over year: The underlying claim costs are expected to increase from 2018 to 2019, which is reflective of anticipated changes in the prices of medical services, the frequency with which consumers utilize services, as well as any changes in network contracts or provider payment mechanisms.
• Increased Profit Margin: After reviewing Cigna’s capital requirements and profitability targets, Cigna Healthcare of Arizona (CHC) raised the profit target assumed in pricing to a level that meets CHC’s corporate hurdle rate.
• Plan design changes and benefit modifications: Changes have been made to certain plans that are resulting in a decrease in expected cost share and therefore a decrease to premium. All plan designs conform to actuarial value and essential health benefit requirements.
• Health Insurance Industry Fee Changes: The suspension of the HII Fee for 2019 results in a decrease to premium compared to 2018.
• Change to the Corporate Tax Rate: The Tax Cuts and Jobs Act decreased the corporate tax rate from 35% to 21%. This has been reflected in Cigna’s filing for 2019 and resulted in a decrease to premium compared to 2018.
All filings for the individual and small group market will be available for public review after October 15.
Check Out Arizona Rate Review Submissions
Navigate to RateReview.Healthcare.gov
Select ACA Compliant Products Search
Enter 01/01/2019 to 12/31/2019 as effective dates