Health insurers’ early ACA exchange filings reveal effect of policy uncertainty

Donald Trump speaking
President Donald Trump's refusal to commit to funding cost-sharing reduction payments is one of the factors that many health insurers had to consider when making their rate requests for their ACA exchange policies next year.

In one of the more concrete examples of the impact the Trump administration is having on the Affordable Care Act marketplaces, a new analysis reveals that the vast majority of exchange insurers mentioned regulatory uncertainty in their 2018 rate filings.

Primarily driving this uncertainty are the mixed signals about whether the individual mandate will be enforced and whether cost-sharing reduction payments will continue to be funded, according to the Kaiser Family Foundation’s analysis.

Most insurers reacted to this uncertainty in one of two ways: They either factored them directly into their initial rate requests, or noted in their filings that they’d raise their rates—or exit the marketplaces—if either the mandate isn’t enforced or the CSR payments aren’t made.

RELATED: Florida insurance regulators ask payers to file backup rates in case Trump administration withholds CSRs

Those factoring in the uncertainties directly added an additional 1.2-20% increase to their rates to account for the end of individual mandate, and a 2-23% additional rate hike to account for the end of CSR payments.

Meanwhile, the insurers that indicated they’d file new rates to adjust to major policy changes said they’d hike rates an additional 3-10% if CSR payments either end or remain up in the air.

For states that use the federal ACA marketplace, rates must be finalized by Aug. 16. Insurers in those states have until Sept. 27 to sign final contracts to participate in the exchanges next year.

As in past years, KFF’s analysis shows wide variation in proposed rates for the second lowest-cost silver plan available in 21 major cities. Wilmington, Delaware, for example, may be looking at a 49% premium hike, while Providence, Rhode Island, could see a 5% decrease. Both figures don’t factor in tax credits, which shield many enrollees from steep rate hikes.

Looking at rates in the 21 cities going back to 2014, the analysis notes that for most of them, the average annual premium growth has been modest. Rates have risen rapidly in some of the cities studied, though some of those, like Nashville, Tennessee, initially had very low rates.

The analysis also indicates that an average of 4.6 insurers set to participate next year across the 20 states and D.C.—the lowest of any year since the exchanges debuted. Since insurers often don’t serve an entire state, KFF notes, the number of choices available to consumers in any given area will likely be lower than the average it calculated.