2018 ACA Rates Likely to Vary Widely Across States

According to a recent report by the Kaiser Family Foundation, early rates for the 2018 ACA individual market indicate that plan premiums will vary widely in 2018.

The report, authored by Rabah Kamal, a policy analyst at the Kaiser Family Foundation, and colleagues, studied the early file rates from 21 cities across the United States. Insurers have yet to file final rates for 2018, however, the researchers noted that these early filing give a look at how the marketplace will look in 2018.

The analysis focused on the second cheapest plan on the marketplace, a silver tier plan for a 40 year old nonsmoker who makes $30,000 per year. The researcher picked this specific plan because 71% of enrollees were in silver plans in 2017. The analysis covered cities from 20 states plus the Washington DC.

The researcher noted that a number of factors impacted how extensively premiums varied across the United States.

“Insurers in this market face new uncertainty in the current political environment and in some cases have factored this into their premium increases for the coming year,” Ms Kamal and colleagues wrote. “Specifically, insurers have been unsure whether the individual mandate will be repealed by Congress or to what degree it will be enforced by the Trump Administration. Additionally, insurers in this market do not know whether the Trump Administration will continue to make payments to compensate insurers for cost-sharing reductions (CSRs), which are the subject of a lawsuit, or whether Congress will appropriate these funds.”

They found that 2018 premiums in this category ranged from a 49% increase over 2017 prices in one city to a 5% decrease in another city. In Wilmington, Delaware, premiums will increase by 49%, from $423 to $631. Conversely, in Providence, Rhode Island, premiums will decrease by 5% from $261 to $248. The researchers noted that premium increases would remain under 15% in approximately half of the cities, while premiums stayed the same or decreased in two of the cities.

The report concluded that uncertainty in the marketplace leaves insurers in a tough spot, which results in varied premiums across the marketplace, as insurers are left to guess how certain factors will impact risk pools.

“Insurers attempting to price their plans and determine which states and counties they will service next year face a great deal of uncertainty,” Ms Kamal and colleagues wrote. “They must soon sign contracts locking in their premiums for the entire year of 2018, yet 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.”

—David Costill