Insurers' early proposals seek steep premium hikes for ACA exchange plans in 2018

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Consumers may be facing steep premium increases on Affordable Care Act exchange plans next year, in part due to the political uncertainty that looms over the future of the marketplaces.

Judging by the early rates insurers have proposed for their Affordable Care Act exchange plans, premiums aren’t looking likely to level off next year.

In Virginia, where Anthem is the largest of seven insurers proposing prices for 2018, the company is requesting an average 38% rate increase, The Washington Post reported. Anthem is also seeking a 34% average rate hike in Connecticut.

For its part, CareFirst is seeking a whopping 52% average premium increase in Maryland, a 21.5% hike in Virginia and a 40% bump for HMO plans in the District of Columbia.

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Such early rate filings could be negotiated down by state regulators, and the insurers proposing them could still decide late in the summer to pull out of the marketplaces entirely, the article noted.

Even so, the proposals add credence to warnings from insurers that the uncertain policy landscape could drive up premiums in the individual markets. If they are correct, it would disprove the Obama administration’s prediction that this year’s premium hikes—an average of 22% for benchmark silver plans—was a “one-time correction” in the individual market. 

One of the biggest factors that could drive up premiums this year is the lack of certainty about whether cost-sharing reduction (CSR) payments will be funded next year. Indeed, a Kaiser Family Foundation (KFF) analysis projected that premiums for silver plans would rise by 19% if CSR payments are withheld.

Some insurers, meanwhile, have already decided against shouldering the risk that comes with participating in the ACA exchanges. Humana, for instance, decided to pull out of the marketplaces entirely in 2018, leaving several Tennessee counties with no on-exchange options next year.

In a letter to the state’s insurance regulator, though, Blue Cross Blue Shield of Tennessee said it would step in to fill that potential void, according to the Wall Street Journal. The insurer emphasized that the move was “in no way a political decision,” and noted that its financial performance in the individual exchanges has improved after years of losses.

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