Market instability contributes to increasing premiums for 2018 Affordable Care Act health plans.
Since the 2016 presidential election, Republican lawmakers have sought to repeal and replace the Affordable Care Act (ACA), arguing that the health law has resulted in market instability and high costs for patients. Thus far, there have yet to be any successful proposals, but these actions and the growing instability have caused many insurers to withdraw from the marketplace, which left patients with limited coverage options.
Of all the plans offered on the ACA marketplace, the most popular—the silver plan—is set to increase an average of 34% in 2018, according to a new analysis from Avalere.
In the study, the authors analyzed 2018 Individual Market HHS Landscape Files for states participating in Healthcare.gov. The average premium was calculated for the average 50-year-old by metal level for previous years and for 2018.
The authors found that silver plans are expected to increase to $743 in 2018 compared with $554 in 2017, according to the study. Since 2015, these plans have increased by nearly $300.
Other plans are set to increase as well. The analysis revealed that platinum plans, which provide the most comprehensive coverage, are projected to increase from $907 in 2017 to $1125 in 2018, according to Avalere. These premiums have jumped significantly since 2015 when they cost only $645.
The authors noted that premium increases vary significantly depending on the state. While silver plan premiums are projected to increase by 69% in Iowa, they are expected to decrease by 22% in Alaska for 2018, according to the study.
Additionally, in some states, the cost of the second lowest cost silver plan may exceed the cost for an average silver plan. The authors note that these changes are typically seen in states with a small number of insurers selling plans.
The study authors believe that several factors have played a role in these significant premium increases. Avalere reports that eliminating subsidies, low enrollment, limited insurer participation, risk corridors, and uncertainty have contributed to high premiums for 2018, according to the study.
Although many patients receive financial assistance and may be able to mitigate some of the cost increases if they select cheaper silver plans. The authors caution that some individuals may choose to not sign up for coverage due to high premiums.
However, these findings are dependent on data from Healthcare.gov and may change based on how states chose to respond to the loss of subsidies. States that do not allow insurers to provide amended rates that account for subsidy cuts may face higher costs after refiling rates, according to Avalere.
“Plans are raising premiums in 2018 to account for market uncertainty and the federal government’s failure to pay for cost-sharing reductions,” said Caroline Pearson, senior vice president at Avalere. “These premium increases may allow insurers to remain in the market and enrollees in all regions to have access to coverage.”