Dive Brief:
-
A new report from the Urban Institute found that premiums for the lowest priced Affordable Care Act (ACA) silver plans for each region increased an average of 32% nationally and gold plans increased an average of 19% for a 40-year-old nonsmoker between 2017 and 2018.
-
There were huge differences by state. Some states even have lower premiums this year compared to last year.
-
The report said the large increases were connected to marketplace uncertainty, policy changes and payers dropping out of the exchanges in 2018.
Dive Insight:
The Urban Institute said there weren't consistent patterns in marketplace premium changes from 2017 to 2018, but it did find “strong correlations between market characteristics and prior pricing and growth rates.”
The report found that states with Medicaid managed care organizations and multiple payers competing for business had the lowest premiums. Iowa saw the largest increase in its lowest-priced silver plan — a premium increase of 117.5%. Alaska had the biggest decrease — a 22.5% drop. States with small premium increases or decreases in 2018 had high 2017 premiums.
The report found increases in the lowest silver plan premiums were usually larger than increases in the lowest gold premiums. However, the average lowest silver premiums remained below the average lowest gold premium.
Despite failed efforts to kill the ACA last year, the actions on Capitol Hill and the White House have at the very least wounded the law. There remains uncertainty in the marketplace concerning future enrollment, risk pools and whether competitors will continue in the exchanges.
The marketplace remains somewhat unstable thanks in part to the new tax law that ended the individual mandate penalty and the Trump administration stopping cost-sharing reduction payments to insurance companies and promoting the expansion of short-term health plans and association health plans.
The Urban Institute report comes days after another study found that some Blue Cross Blue Shield plans made money in the ACA marketplace for the first time in 2017. The reason for the profit involved large premium increases that were an average of more than 25% in 2017. That is likely because those Blues plans were able to figure out the actual cost of caring for members in that marketplace after losing money for years.
Given the continued uncertainty, payers in the exchanges need to increase rates even more next year to offset people and payers fleeing the exchanges this year.