The Marketplace Premiums Increase: Underwriting Cycle Or Death Spiral?

The election of Donald Trump to the Presidency has accelerated and transformed health policy discussions. Another important recent development was the October 24 announcement by the Department of Health and Human Services (HHS) that the average increase in premiums for Marketplace plans would be 22 percent overall, and 25 percent for states using HealthCare.Gov. In this post, we aim to illuminate the underlying forces that led to these increases in premiums so as to clarify the historical record and provide useful information for interested parties who are dealing with the Affordable Care Act (ACA). We have been tracking changes in employer-based insurance since 1986, first with the predecessor surveys to the annual Kaiser Family Foundation/Health Research & Educational Trust (Kaiser/HRET) Employer Health Benefits Survey (conducted at the Health Insurance Association of America and KPMG), and since 1999 with the Kaiser/HRET annual surveys themselves. With funding from the Commonwealth Fund, we also have followed changes in Marketplace plans since 2014, the first year of Marketplace operation. It should be made clear that the 22 percent figure applies to Marketplace plans. These plans cover about 7 percent of the U.S. population (Exhibit 1). The figure does not apply to the 50 percent of the population with employer-based insurance where premiums have been growing 3-4 percent a year since 2011, a historic low. Nor does it apply to Medicare, where per capita costs also have...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: Following the ACA Insurance and Coverage employer-sponsored coverage Employer-Sponsored Insurance Massachusetts reinsurance Republicans Source Type: blogs