FACTSHEET: 2018 ACA INSURANCE EXCHANGE PREMIUMS
- As states release them, HHS is posting proposed 2018 plan rate filings for the ACA insurance exchanges on https://ratereview.healthcare.gov/, searchable by state and insurance carrier.
- Premiums for many 2018 ACA insurance plans are expected to increase significantly, with uncertainty being a key driver.
WHY ARE PREMIUMS INCREASING?
- Medical Cost Trends: Health spending in 2018 projected to grow by 6.5%—similar to 2017—well above wage growth and inflation.a. Driven by increasing utilization, hospital and physician prices, prescription drug costs, and higher rates of chronic diseases.
- Legislative and Regulatory Uncertainty: As they face uncertainty on the future of the ACA and federal funding for cost-sharing reductions subsidies, insurers are pressured to either hike their premium prices or exit the marketplace.
- Resumption of the Health Insurer Fee: Without an extended moratorium, resumption of the fee is expected to increase premiums by 1 to 3 percent.
- Risk Pool Adjustments: As insurers acquire greater information, they continue to revise premiums to account for enrollee risk pools that are likely sicker and costlier than initially expected.
- Lower Enrollment: Approximately 8.8 million enrollees on Healthcare.gov were confirmed as of December 28, 2017, down from 9.2 million in 2017—despite higher rates of single week sign-ups than in previous years.a. Though currently short of the 12.2 million signups in 2017, some states’ insurance exchanges remains open for enrollment.
KEY FACTORS TO KEEP IN MIND
- Initial Issuer Rate Filings: The proposed premiums do not account for rate review, consumer shopping behavior, or premium subsidies, which can significantly affect the actual premiums enrollees pay.
- In 2017, approximately 84 percent of exchange plan enrollees received subsidies of an average $371, reducing their premiums by an average 78 percent and shifting those costs to taxpayers.
- High Variation: Proposed premium changes vary substantially from state to state, county to county, and insurer to insurer.
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