Citing financial pitfalls over the last two years due to sicker, costlier patients in Affordable Care Act marketplace plans, insurers are predicting double-digit premium increases for 2017, according to the Associated Press.
In Virginia, nine insurers are predicting premium increases of 9.4 percent to 37.1 percent, according to the AP. Analysts expect 2017 premium hikes to be higher than previous years to mitigate the low rates insurers offered over the last two years to attract new consumers. That, coupled with high-cost new enrollees, has led to billions in losses and forced UnitedHealth to pull out of the majority of state exchanges.
"What they are doing now is trying to catch up," Deep Banerjee, a health insurance analyst at Standard & Poor's, told the AP.
Marilyn Tavenner, CEO of America's Health Insurance Plans, has already hinted that premiums will be higher in 2017 because of greater medical costs and a spike in pharmaceutical spending. However, last year, insurers predicted huge premium increases in 2016, but premiums only increased an average of 8 percent. Although several of the big five insurers have reported substantial losses on marketplace plans last year, others have found success by focusing on narrow networks and capitalizing on Medicaid managed care plans, according to Bloomberg BNA.
The Department of Health and Human Services downplayed the initial 2017 projections, telling the AP that "averages based on proposed premium changes are not a reliable indicator of what typical consumers will actually pay."