Premiums for 2017 ACA Exchanges Not as High as Previously Expected

Many insurers have claimed losses from selling health insurance on Affordable Care Act (ACA) marketplaces.

This has resulted in numerous key players, and other smaller insurers, from reducing the amount of marketplaces they participate in, or dropping out altogether. Health insurers participating in New Hampshire’s ACA marketplaces have proposed premium hikes from as low as in the negatives to an increase of up to 60%, according to an article by the New Hampshire Union Leader.

Anthem Inc, a company that has recently been involved in a federal lawsuit regarding its acquisition of Cigna Corp, is offering a decrease in plan premiums by .4%. Other insurers, such as Maine Community Health Options and Minuteman Health Inc, are proposing larger increases, such as 31.8% and 59.98%, respectively.

Increases in Harvard Community Health Plan premiums range from 2.98% to 10.66%. Illinois is having a similar problem with coverage in their marketplaces.

Blue Cross Blue Shield is the state’s most popular insurer, but they are proposing a rate increase of up to 45%, according to the Chicago Tribune. The insurer said they are seeking such a high rate due to the increasing costs of healthcare.

Another insurer, Coventry Health Care of Illinois, proposed an increase of approximately 21%. While financial losses and the increasing cost of healthcare are major factors for the increases, it is likely that the expiration of the ACA’s reinsurance program is contributing to these large increases.

A recent analysis conducted by Kaiser Family Foundation found that the average premium increase in the second-lowest-cost Silver plan is projected to be 9% in 2017, compared with 2% the previous year. The analysis also found that the average 9% premium increase would still be on track to reduce the budget deficit.

The Congressional Budget Office projected the costs of marketplace premiums and how much they could increase while still reducing costs. In 2016, the estimated average premium for the second-lowest-cost Silver plan would be $5200 for 1 person. According to the analysis, the actual average premium in 2016 for these plans was $4583, 12% below the projection.

For 2017, with an increase of 9%, plans are still on track to reduce the deficit. While increases like 60% and 45% seem excessive, all proposals are not final until the insurer receives approval from the state’s Insurance Department.