The closure of South Carolina’s Consumers’ Choice Health Plan in October 2015 could lead to higher health insurance premium rates next year, reported The Post and Courier.
Consumers’ Choice Health Plan was set up under the Affordable Care Act (ACA) in 2010 with a $87.8 million federal loan.
The co-op’s closure forced the state’s guaranty fund to cover $48 million worth of outstanding insurance claims, said S.C. Department of Insurance director Ray Farmer.
“It was more than we were expecting,” Farmer remarked.
Insurance companies operating in the state contribute to the guaranty fund, the director said. He also added that the companies are allowed to pass off those expenses as higher premiums.
“That $48 million has been paid by the insurance industry,” he said. “Ultimately, our taxpayers will foot the bill.”
BlueCross BlueShield of South Carolina was mum on details whether their premiums would increase for 2017.
“The exit of Consumers’ Choice Health Plan has created unexpected and unfortunate financial obligations for existing insurers,” said BlueCross BlueShield spokeswoman Patti Embry-Tautenhan in a prepared statement. “[It] represents another example of upheaval in the exchange marketplace, which continues to affect consumers.”
Health insurance companies that intend to sell their ACA plans in South Carolina next year must submit their proposed rates and plans to the state Department of Insurance by May 25. Those carriers planning to sell their plans outside of the federal health insurance exchange have until July 11 to submit their rates and plans.
The department will review the rates and disclose them publicly in October.
Farmer said that it is still too soon to determine what next year’s prices would look like.
“We’ll just have to wait to see what the filings show,” he said. “We have no way of knowing what rates for 2017 will be at this point.”