With the individual markets facing heightened uncertainty, it is looking likely that health insurers will once again need to hike plan premiums.
Joan Budden, chief executive of Michigan-based Priority Health, told the Wall Street Journal that “premiums are probably on track to increase significantly again” since an already difficult individual market is facing more instability.
One of the causes, as identified by a recent Congressional Budget Office report, is that the individual mandate will disappear in 2018 under House Republicans’ Affordable Care Act repeal and replacement proposal. Thus, the CBO predicted that relative to the ACA, individual market premiums would rise by 15% in 2018 under the American Health Care Act.
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But there are other factors at play as well. J. Mario Molina, CEO of Molina Healthcare, told the WSJ that he expects individual plan premiums to go up 30% next year, partially driven by the lack of clarity surrounding cost-sharing reduction (CSR) payments.
While the Republican healthcare bill maintains CSRs through 2019, it is not certain they will be funded during that transition period. In fact, a case appealing a judge’s ruling that Congress’ appropriation for CSRs was illegal is currently on hold.
Major insurers like Anthem are therefore pushing Congress and the Trump administration to ensure CSRs are properly funded, saying this is a necessary step to stabilize the individual markets.
Some insurers opted for exit
For other insurers, the volatility of the individual markets simply became too much of a business risk. In 2017, Aetna pulled out of all but a few exchanges in which it previously operated, and its CEO has said the company has no plans to return next year.
Humana, which also pulled back in 2017, said in February that it would exit the marketplaces entirely in 2018. And CEO Bruce Broussard doesn’t see a post-2018 as likely either, he told analysts at the Barclays Global Healthcare Conference on Thursday. Instead, the insurer plans to focus its energy on Medicare Advantage.
“I want to emphasize to the investors, as we think about the future, you won’t see us go in the exchanges,” Broussard said, adding, “We have planned that exit—we’ve made the commitment there—and even if they were to change it to be very viable, we wouldn’t be back in.”