Individual market forecast: Fewer insurers, higher premiums and more instability through 2019

Health insurance benefits form
Federal policies enacted in the past year have driven uncertainty and instability in the individual health insurance market,
leading to higher premiums and less consumer choice, say insurers in a report from the Robert Wood Johnson Foundation. (Getty/michaelquirk)

Federal policy decisions reduced consumer choice and raised healthcare insurance premiums in 2018, according to the Robert Wood Johnson Foundation. Higher prices and fewer insurers are likely to follow in 2019.

The report presents data collected by researchers from the Urban Institute and Georgetown University’s Center on Health Insurance Reforms, drawn from structured interviews with 10 insurance companies participating in ACA marketplaces.

While most of the insurers indicated a willingness to continue to provide insurance to the individual market, they expressed concerns about instability generated by federal policies.

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In particular, insurers pointed to the heavily touted repeal of the individual mandate as a major contributor to uncertainty in the individual market. Insurers compensating for the mandate’s rollback reportedly increased premiums in some areas during 2018. Respondents also expected those premium hikes would continue into 2019, when the penalty associated with the individual mandate goes to zero.

The administration’s abrupt end to cost-sharing reduction (CSR) payments in 2017 also contributed heavily to premium growth, according to the report. Additional uncertainty surrounding whether the administration intends to restore those reimbursements has also sown confusion, with insurers suggesting a restoration of the CSR payments could drive prices up for healthcare consumers who receive them.

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Respondents expressed unanimous concern about the administration’s plans to expand short-term and association health plans, which they expect to further destabilize ACA markets. Nevertheless, some insurers indicated they would look into offering such plans to stay competitive.

As insurers measure consumer response to the rollback of the individual mandate, they continue to be nervous about instability in the individual market on multiple fronts, according to Anne F. Weiss, the managing director of the Robert Wood Johnson Foundation’s efforts to build a culture of health by transforming health and healthcare systems.

“Greater marketplace stability and certainty about the direction of federal policy is needed to ensure the needs of consumers are met,” she said in a statement.

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