Health plans who sell on the ACA exchanges must soon lock in their premium rates, but the uncertainty surrounding the future of the health care system makes them jittery, according to a Kaiser Family Foundation report. That’s because “Congress or the Administration could make significant changes in the coming months to the law—or its implementation—that could lead to significant losses if companies have not appropriately priced for these changes. Insurers vary in the assumptions they make regarding the individual mandate and cost-sharing subsidies and the degree to which they are factoring this uncertainty into their rate requests.”
Insurers filed their preliminary premium rates on August 1. There was some sticker shock. ACA plans in Idaho, West Virginia, South Carolina, Iowa and Wyoming want to hike premiums next year by about 30%. Meanwhile, ACA plans in New Mexico, Tennessee, North Dakota and Hawaii plan on hiking premiums about 20%. Health plans must sign an annual contract with states by September 27 if they want to compete on the Healthcare.gov website.
But, as the Kaiser Family Foundation notes, the context this year is entirely different. “In the past, requested premiums have been similar, if not equal to, the rates insurers ultimately charge,” the report states. “This year, because of the uncertainty insurers face over whether the individual mandate will be enforced or cost-sharing subsidy payments will be made, some companies have included an additional rate increase in their initial rate requests, while other companies have said they may revise their premiums late in the process.”
Source: Kaiser Family Foundation