An Oliver Wyman survey conducted in early April asked insurers about the 2018 insurance market, premium increases and whether payers plan to remain in the Affordable Care Act (ACA) exchange markets.
A “vast majority” of surveyed payers are still committed to ACA exchanges, though insurers are still cautious about 2018. Only one survey respondent said it plans to leave the exchanges.
- Oliver Wyman said the results could change as payers get more information about 2017 ACA plan performance and potential regulatory and legislative changes, including changes to cost-sharing subsidies.
The survey results come as health insurance officials met with CMS Administrator Seema Verma on Tuesday. Payer leaders hoped to get reassurance from Verma that President Donald Trump's administration would not cut cost-sharing subsidies.
America’s Health Insurance Plans spokeswoman Kristine Grow said in a statement that insurers spoke to Veerma about individual market instability that has occurred because of “the uncertainty of funding for the cost-sharing reduction program.”
During the meeting on Tuesday, Verma reportedly did not make any promises and suggested that Congress will decide on whether to appropriate money for cost-sharing subsidies. Payers are cautious when it comes to setting 2018 ACA market rates. They want more information on the cost-sharing subsidies, which help pay insurance companies to cover lower-income Americans.
Trump has warned that he is willing to cut payer subsidies unless Democrats negotiate a new GOP healthcare reform plan. House Speaker Paul Ryan pulled a bill to replace the ACA last month after conservative Republicans refused to back the plan.
Still, the survey found that 70% of respondents expect to stay in the ACA market in 2018 without any major strategy shift. The remaining 30% said they are looking for ways to stabilize their ACA lines of business. Some of the plan shifts include modifying plan offerings, such as eliminating gold-level plans, and changing to plans with tighter benefit design, such as HMOs or narrower network plans, according to the survey results.
Most of the respondents said they plan to maintain their existing geographic footprint, but 25% expect to change strategy regarding geographies, such as withdrawing from some regions or even expanding into new regions.
The survey found that payers plan to wait as long as possible before setting 2018 rates in hopes of getting more guidance from the government. Nearly half of respondents said it’s too early to determine rate increases and that they need to evaluate the 2017 risk pools and performance.
For the payers ready to set rates, the survey found “wide variation” of rate increases. Some insurers plan single-digit increases while others are looking for more than 30% increases. Half of the respondents said they plan to increase rates by 10% to 20%, one-quarter of respondents expect to increase rates by less than 10%; and another one-quarter plan a larger than 20% increase. The average rate increase was 22% in 2017.
“We expect that as carriers gain additional knowledge of their 2017 experience, their decisions will become more firm. Likewise, if there is definitive action on cost sharing subsidies or other policy proposals, payers may revisit their 2018 positions. For now, though, issuers seem willing to continue to serve this market,” according to the survey authors.