WASHINGTON, June 13, 2018 /PRNewswire-USNewswire/ -- The
American Academy of Actuaries has identified increasing health care
costs and the effects of public policy changes as among the major
drivers of 2019 premium rate changes for individual insurance
coverage that is subject to Affordable Care Act (ACA) rules.
"The individual market, which had shown signs of stabilizing,
now faces a potential deterioration of the risk pool due to policy
changes that reduce incentives for healthy individuals to enroll in
ACA marketplace plans. This deterioration and other factors could
drive premiums higher for 2019," said Academy Senior Health Fellow
Cori Uccello.
Drivers of 2019 Health Insurance Premium Changes, an
issue brief authored by the Academy's Individual and Small Group
Markets Committee, details the rate change drivers, including:
- Underlying growth in health care costs. Projected
increases in health care costs for 2019 are expected to be in the
range of 5 to 8 percent, similar to the increases projected for
2018.
- Recent and pending public policy changes. Insurers may
be adjusting rates to account for the effects of the elimination of
the individual mandate penalty, the pending availability of
short-term limited duration plans and association health plans, and
potential changes to how insurers load premiums to reflect the
costs of providing cost-sharing reduction subsidies.
- Changes in the risk pool composition and insurer
assumptions. In addition to expected risk pool changes due to
public policy changes, insurer assumptions for 2019 will reflect
whether experience has differed from what was assumed for 2018
premiums.
- State actions. Actions undertaken by individual states
could have an impact on 2019 premiums, such as new state
reinsurance programs, the imposition of individual mandate
penalties, and rules that would either facilitate or prohibit the
sale of plans that don't comply with ACA requirements.
One of the factors broadly exerting downward pressure on premium
rates for 2019 is the suspension of the health insurance provider
fee, per the Extension of Continuing Appropriations Act of 2018.
Excluding this fee will reduce expected 2019 premiums by about 1 to
3 percent.
Download the issue brief and other analysis of health policy
issues from the Academy at actuary.org.
The American Academy of Actuaries is a 19,000-member
professional association whose mission is to serve the public and
the U.S. actuarial profession. For more than 50 years, the Academy
has assisted public policymakers on all levels by providing
leadership, objective expertise, and actuarial advice on risk and
financial security issues. The Academy also sets qualification,
practice, and professionalism standards for actuaries in
the United States.
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SOURCE American Academy of Actuaries