Gov. Sanders says negotiations reduce size of health insurance premium increases

Gov. Sarah Sanders said Friday (Sept. 19) she has negotiated a reduced increase in health insurance premiums with companies doing business in Arkansas’ exchange marketplace.

In early August, health insurers submitted to the Arkansas Insurance Department estimates for premium increases next year that ranged from 20% to 54% higher. At the time, Sanders said^[1] the premium hikes were “excessive,” “discriminatory,” and “insane.”

Sanders said Friday the average rate increases will be 22%. She also said it is the first time the state has rejected proposed insurance rate increases for being excessive.

“Healthcare costs are growing out of control, and Arkansans are fed up. As part of my administration’s broader strategy to expand access and lower costs, we were able to negotiate down planned increases, easing the burden on both beneficiaries and taxpayers,” said Sanders. “More work remains, but this is a good starting point and shows that when we stand up to insurance companies, we can win tangible benefits for the people of our state.”

The rate requests apply to two different plans that comply with the Affordable Care Act: on-market plans, which are subsidized, and off-market, which are not.

The state insurance department must approve the increases and final rates must be published by Nov. 1 in time for the federal Health Insurance Marketplace’s open enrollment period.

Arkansas Blue Cross and Blue Shield, which had submitted a 23.3% increase for one of its plans, said it appreciated working collaboratively with the insurance department and governor’s office. It said higher costs have been driven by greater utilization and higher costs.

“The reduction in our earlier proposed rates reflects a shared commitment to ensuring premiums are as affordable as possible, despite skyrocketing healthcare costs due to the increased delivery of medical services and excessive prescription drug prices charged by pharmaceutical companies,” Blue Cross said in a statement. “This decision is driven by several key factors. The timing of the rate filings, changes to products to limit access to higher cost national providers, and greater certainty around the funding level for the ARHOME program all contributed to the proposed reductions.”

“We remain intensely focused on managing all aspects of the costs that contribute to premium increases, including our own administrative costs, and have decreased our operating budget by cutting costs for consultants, advertising, vendors, software, equipment, contract labor, and facilities. As an Arkansas-based, not-for-profit insurance company, Arkansas Blue Cross’ mission is to serve the people of our state with care and integrity,” the statement read.

A full breakdown of health plans and rate changes is available below.

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