A handful of states, including Tennessee, Mississippi, Illinois and Kentucky, announced what experts have long anticipated: Insurance premiums on individual ACA health plans will increase significantly in 2017
The rate hikes are highest in Tennessee, where premiums on some ACA insurance plans are set to increase 62 percent, according to the Wall Street Journal. Mississippi and Kentucky will see increases of 43 percent and 23 percent on some individual plans, respectively, the paper adds. In Illinois, regulators announced benchmark plan premiums could rise 43 percent, according to the Chicago Sun-Times.
Still, “headline rate increases do not reflect what consumers actually pay,” HHS official Kathryn Martin told the news outlet. Tax credits available to some lower- and middle-income people are pegged to the cost of insurance in different geographic regions, HHS has said.
The hikes are more of a one-time market correction than a trend, according to a Kaiser Family Foundation analysis released last month. Premiums on ‘benchmark’ ACA plans have been lower than the Congressional Budget Office’s expectations, including when substantial 2017 increases are taken into account.
High growth in pharmaceutical spending, year-to-year increases in medical costs and costlier ACA exchange customers contribute to the premium hikes, AHIP’s CEO Marilyn Tavenner said earlier this year.
A variety of policy tools, including more substantive consumer tax credits, the public option, easing barriers to entry in ACA markets and extending reinsurance could help maintain the viability of the ACA.