Now that open enrollment for the Affordable Care Act's insurance exchanges is behind us, the attention focuses on setting next year's rates, reports the Wall Street Journal. That puts all eyes on those who predict medical costs: actuaries.
Actuaries receive no prior medical information on enrollees, so they don't have much to go on when estimating future costs. And with policymakers tweaking the reform law sporadically, oftentimes the price setters must make adjustments on the fly, according to the WSJ.
So what's at stake for next year's premiums? Many actuaries predict the rates will depend on the market and the specific insurance company. But certain trends will lead to higher premiums, including the reform tax on insurers and lower funds available for the law's reinsurance protection, notes the article.
What's more, rate increases stem from the Obama administration's many delays and changes to the healthcare reform law, particularly the decision to allow consumers to remain covered under noncompliant plans for two more years, previously reported FierceHealthPayer.
"We'll see rate increases in the marketplaces, but I think it's anyone's guess" about what the precise changes will be, Sabrina Corlette, project director at the Georgetown University Center on Health Insurance Reforms, told Insurance & Financial Advisor. "It's like nailing Jell-O to a wall."
For those selling plans on HealthCare.gov, the deadline to file initial 2015 rates with federal regulators is late May, forcing actuaries to play a guessing game about new enrollees. Industry experts say the cost trend may be the biggest variable when setting prices for next year, according to IFA.
Given the uncertainties that come with implementing the healthcare reform law, some look to the future for more stability. "We always viewed this as a three-year plan," Brian Lobley, senior vice president of marketing and consumer business at Pennsylvania's Indepedence Blue Cross, told IFA. "We always thought there would be a lot of volatility in years one and two. We really thought 2016 would [bring] market stability in the individual market."
For more:
- here's the Wall Street Journal article (subscription required)
- read the Insurance & Financial Advisor piece