South Carolinians who buy their health insurance of the state exchange may have to shell out hundreds more next year for premiums, according to information released by the state Department of Insurance on Thursday.
Filings released by the agency Thursday indicate the only insurer on South Carolina’s exchange BlueCross BlueShield said it would raise premiums by 31 percent next year for the average plan. State Department of Insurance director Ray Farmer blamed uncertainty about whether the federal government will continue giving subsidies to insurers to help cover customers on the exchange.
“A main percentage of that increase, approximately 20 percent, is due to uncertainty in the market,” Farmer told South Carolina Radio Network.
Those subsidies are known as “cost sharing reduction” (CSR) payments and help keep insurance premiums artificially low in order to make them more affordable. Another driver is that insurance companies do not expect the individual mandate (part of the Affordable Care Act which requires all Americans to have insurance) to be enforced next year. That means healthy individuals may not buy plans, meaning higher risk from insurance companies who face customers more likely to collect benefits.
According to BlueCross BlueShield’s filings, an average Richland County 60-year-old single adult who does not use tobacco will see their “silver” plan premium increase from $901 per month to $1,206 per month. A 45-year-old in the same situation would see their premium increase from $424 to $567 per month, while a 25-year-old will go from $307 to $391.
The increase only impacts those on the exchanges and does not account for the income tax credit many people who get the plans are able to use each year. Open enrollment for the exchanges begins in November.
Farmer said his office will make sure BlueCross BlueShield lowers the premium increase if the federal government does continue the CSR payments.