Every state faces steep individual marketplace premium increases in 2019 and beyond, due at least in part to ongoing uncertainty about health policy on the federal level.
Covered California, the state's Affordable Care Act exchange, projects (PDF) that premiums in every state will increase between 12% and 32% in 2019, with increases that could be between 35% and 90% between 2019 and 2021. It estimates that 17 states face "catastrophic" increases of up to 90% or more in that window.
Sixteen states could see increases of up to 50% or more, and the remaining 15 would likely see premiums rise by up to 35% between 2019 and 2021, according to the report, which is based on each state's risk mix in 2016 and enrollment trends from 2017 and 2018, along with state-specific data such as the number of insurers in the markets.
A new analysis by @CoveredCA finds that every state in the nation is at risk for major premium increases due to recent policy changes and uncertainty at the federal level. 17 states are at risk for "catastrophic" increases of 70+%. #ACA #AHIP Read report: https://t.co/PzPhceW54I pic.twitter.com/YnHwMuOd0s— Covered California News (@CoveredCAnews) March 8, 2018
The trends, according to the report, are fueled by healthier consumers leaving the individual markets following the repeal of the individual mandate. Premiums are, on average, increasing at a rate more than double that of medical inflation.
Peter V. Lee, executive director of Covered California, said in an announcement that major premium hikes could impede access to insurance for many people who get it through the individual markets.
"The challenges to our healthcare system are threatening to have real consequences for millions of Americans," Lee said.
A national analysis by @CoveredCA projects 2019 premium increases of 30% in some states and cumulative increases of 90+% in the next 3 years without major policy actions. #ACA Read full release: https://t.co/Y1ZeyAJyDV pic.twitter.com/hLm6uyETVZ— Covered California News (@CoveredCAnews) March 8, 2018
The steep hikes are estimates that don't account for federal or state intervention that could mitigate instability, according to the report. Covered California offers severl policy changes that could stabilize the markets and lower costs, including:
- Funding cost-sharing reduction payments: While offering CSR payments would not lower premiums directly, it sends a clear message to insurers, according to the report.
- Establishing a reinsurance program: Depending on how health plans are designed, a reinsurance program with $15 billion in annual funding could decrease premiums by 10% to 20%.
- Investing more in marketing and outreach: Spending more on marketing to bring younger, healthier people into the markets will improve the risk mix, lowering costs.
- Regulating alternative products such as association health plans and short-term plans: States can provide more direct oversight of these plans, including requiring more comprehensive coverage.
"The issues affecting markets are multi-faceted and vary across states, and policymakers should consider a mix of policy options that, in combination, can achieve the goal of ensuring that individuals have access to quality, affordable choice of coverage," according to the report.
Legislation aimed at stabilizing the ACA exchanges is being worked on in both the House and Senate, and lawmakers have been optimistic about the likelihood of a bill being passed.
The White House last week pushed for conservative elements to be included in a stabilization bill, including changing the ACA's rate-banding rule to allow insurers to charge older people five times as much as younger people.