Analysis of 2017 Premium Changes and Insurer Participation in the Affordable Care Act’s Health Insurance Marketplaces

Marketplace premiums under the Affordable Care Act (ACA), already a subject of perennial interest, have gained even more attention amid unfavorable financial results from some insurers, as well as initial reports of steep premium increases requested for 2017. Several factors will influence how premiums will change in 2017, and there is reason to believe that increases will be higher than in recent years.

Many of the initial reports of premium increases for 2017 have been based on anecdotal examples or averages across insurers. This brief takes a different approach, presenting an early analysis of changes in insurer participation and premiums for the lowest-cost and second-lowest silver marketplace plans in major cities in 16 states plus the District of Columbia where complete data on rates is publicly available for all insurers. Using this information, we are able to calculate the premium a specific person might pay without a premium tax credit, and take into account new plans entering the market. It follows a similar approach to our analyses of 2014, 2015, and 2016 marketplace premiums. The two lowest-cost silver plans are significant because they are the most common plan choices in the marketplaces, and the second lowest-cost plan is the benchmark used to calculate government premium subsidies.

While we cannot generalize to all states until more data become available later this year, in most of these population centers, the costs for the lowest and second-lowest silver plans are, in fact, increasing faster in 2017 than they have in previous years. Based on insurer rate requests, the cost of the second-lowest silver plan in these cities will increase by a weighted average of 9% in 2017. Last year, premiums for the second-lowest silver plans in these areas increased 2% following review by state insurance departments.  There is substantial variation across markets, with premium changes for second-lowest silver plans ranging from a drop of 13% to an increase of 25%. Premiums for 2017 are still preliminary and could be raised or lowered through these states’ rate review processes.

We also find that some states will have fewer insurers participating in 2017 than participated in 2016.  On average across these 17 marketplaces, participation is down from 2016 but similar to that of 2014. In the 17 marketplaces included in this analysis, 7 states will see insurer participation remain steady or increase, while the other 10 states will see a drop in the number of issuers, in many cases due to the withdrawal of UnitedHealth.

Read the rest of this comprehensive report by going here….

Source: The Henry J. Kaiser family Foundation