Insurers Seek ACA Premium Bumps of 30%+
There is uncertainty in the health-insurance marketplaces as insurers around the U.S. try to make decisions about rates and participation for next year amid open questions about changes that could come from the administration and Congress.
Insurers face a mid-August deadline for completing their rates. The companies have until late September to sign federal agreements to offer plans in 2018. In some cases, insurers warn, the figures revealed by federal regulators may be lagging.
In some states, major health insurers seek increases as high as 30% + for premiums on 2018 ACA plans. Big insurers in Idaho, West Virginia, South Carolina, Iowa and Wyoming want to raise premiums by averages close to 30% on rate requests (per the U.S. Department of Health and Human Services). Major marketplace players in New Mexico, Tennessee, No. Dakota and Hawaii indicated they were looking for average increases of 20% +.
Finally, the variability of rate increases for the same insurers across different states reflects different market situations across the nation, as shown in the chart above.
Insurers’ decisions depend on the administration and Congress. The most important question is whether the government continues making payments that reduce health-care costs for low-income exchange enrollees.
Insurers are also concerned about whether the administration will enforce the requirement for most people to have insurance coverage, which industry officials say helps hold down rates by prodding young, healthy people to sign up for plans.
Rate increases will be blunted for many exchange enrollees since low-income people receive federal subsidies that cover much of their premiums. But, increases could be harsh for those not eligible for the subsidies.
In a number of cases, insurers’ rate requests are well above 20% because of market factors not directly tied to the federal uncertainty. Some insurerswarn they may add 18% – 20% to existing rate requests if the cost-sharing payments aren’t locked in. They would also pull out of more states beyond the five exchanges where leaving sharply reduces its footprint.