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Bipartisan health bill includes subsidies; hefty ACA rate hikes in more states

President Donald Trump has discussed a bipartisan healthcare bill with Sen. Lamar Alexander, R-Tenn., that includes the cost-sharing reduction payments made under the Affordable Care Act, which the president decided to discontinue last week, Bloomberg News reported. Trump has reportedly urged Alexander to take legislative steps to pay the subsidies. Under Alexander's proposal, the payments would come with assurances they will help people lower their out-of-pocket costs, according to the report.

In Arkansas, some ACA plan rates in will jump nearly 25% in 2018, a spokesperson for the state's insurance regulator confirmed to S&P Global Market Intelligence. The approvals assumed the ACA payments would not be paid to insurers. Final rates will be released Oct. 17 to reflect actual increases.

And in Pennsylvania, health insurance rates for individual ACA plans will rise an average 30.6%. Trump's decision to end subsidies caused the premiums to jump, the state's Acting Insurance Commissioner Jessica Altman said. The state also released information on approved 2018 individual and small group rates.

The Center for Medicare and Medicaid Services reversed an earlier decision and notified the Montana Department of Insurance that it will allow Montana Health Cooperative and PacificSource Health Plans to file rate increases for plans offered at the state's individual market after the president's decision to end the ACA payments, The Associated Press reported. Montana Health will file for a rate hike of 24% on top of the 4% increase, while PacificSource has filed for an average 11% increase for a standard "silver plan" on top of the 7.4% increase.

In a letter dated Oct. 13, the CMS granted a 12-month temporary extension for Kansas' privatized Medicaid program, KanCare, The Kansas City Star reported. It was originally set to expire Dec. 31. The federal government in January denied the state's request for an extension, citing its failure to comply with federal statutes and regulations, as well as with its Medicaid State Plan. The state is expected to submit its full extension application to the CMS by Dec. 31.

Minnesota Gov. Mark Dayton signed a federal waiver agreement to secure Minnesota's reinsurance program. The program helped the state lower 2018 premiums by an average of 20% for consumers buying coverage on the state's individual market, compared to what premiums would have been without reinsurance, according to Dayton.

Deals and potential transactions: XL Group Ltd will acquire a 20% stake in India-based Mahindra Insurance Brokers Ltd. through its subsidiaries.

Apollo Global Management LLC has agreed to acquire a majority stake in Catalina Holdings (Bermuda) Ltd. Affiliates of Apollo made an initial investment in Catalina in December 2013. Additionally, Catalina told The Insurance Insider that its existing backers, Caisse de dépôt et placement du Québec and Ontario Teachers' Pension Plan, would exit as part of Apollo's additional investment.

Catastrophe loss estimates continue to pour in. Argo Group International Holdings Ltd. has provided preliminary pretax catastrophe loss estimates for the third quarter of $85 million to $110 million, net of ceded reinsurance recoverables, reinstatement premiums and expected profit commissions.

Aspen Insurance Holdings Ltd. expects about $310 million in pretax losses, net of reinsurance and reinstatement premiums, related to hurricanes Harvey, Irma and Maria.

Insurance claims resulting from Hurricane Irma have further risen in Florida and now total nearly $4.94 billion, according to the latest data from the state's Office of Insurance Regulation. A total of 747,534 claims had been filed as of Oct. 13.

Some of the largest health insurers are likely to see their earnings rise year over year in the third quarter thanks to their decisions to pull out of ailing Affordable Care Act exchanges, according to industry analysts. Of the nine health insurers reviewed in an S&P Global Market Intelligence analysis, seven are projected to see earnings per share growth year over year.

UnitedHealth Group Inc. posted third-quarter earnings from operations of $4.09 billion, up from $3.58 billion in the year-ago quarter. The company also raised its outlook for 2017 GAAP net earnings to reach $9.45 per share from the earlier forecast of $9.20 per share to $9.35 per share.

Brown & Brown Inc. reported third-quarter organic revenue growth of 3.4%, up from the previous quarter's rate of 1.6%.

Independence Holding Co. board voted to increase the cash dividend to 17 cents per share annually, representing a 42% increase from the previous annual dividend of 12 cents per share.

Rockhill Insurance Co. will not write new or renewal excess and surplus lines property accounts after Nov. 1, The Insurance Insider reported. The decision follows State Auto Insurance Group's announcement that it is considering various options for its excess and surplus lines business. Rockhill is an affiliate of State Auto.

Kansas Insurance Commissioner Ken Selzer approved National Council on Compensation Insurance Inc.'s workers' compensation 2018 rate filing that shows a decrease of 7.6% in the voluntary base rate and a decrease of 5.8% for assigned risk workers' comp rates. The new rates take effect Jan. 1, 2018.

Featured news

Johnson and Johnson Q3 earnings rise; Trump wants short-term healthcare fix: Johnson & Johnson booked third-quarter adjusted net earnings of $5.21 billion, or $1.90 per share, up 11.2% from $4.68 billion, or $1.68 per share, a year earlier. The company also increased its adjusted earnings guidance for 2017 to a range of $7.25 to $7.30 per share.

Financial news in other parts of the world

Asia-Pacific: China cracks down on financial fraud; IOOF to buy ANZ's wealth biz

Europe: Credit Suisse breakup bid; May dines with Juncker; Spanish banks suffer anew

Middle East & Africa: Mashreqbank, UBA 9-month profits rise YOY; Fitch acts on Kuwaiti lenders

The day ahead

Early morning futures indicators pointed to a mixed opening for the U.S. market.

In Asia, the Hang Seng climbed 0.02% to 28,697.49, while the Nikkei 225 rose 0.38% to 21,336.12.

In Europe, around midday, the FTSE 100 rose 0.18% to 7,540.74 and the Euronext 100 gained 0.06% to 1,050.03.

On the macro front

The import and export prices report, the Redbook, the industrial production report, the housing market index, the Treasury budget and the Treasury International Capital report are due out today.