ACA Rate Saw Modest Hike, but "Seismic Shift" in Enrollment Is Unlikely

From Health Plan Weekly

Affordable Care Act (ACA) exchange premium increases are on track to moderate significantly in 2019, according to a new analysis — but experts say insurers shouldn't expect that to materially affect individual market enrollment or plan sales.

The analysis, produced by Avalere in partnership with the Associated Press, examined rate filings in 47 states and Washington, D.C., and found an average 3.3% increase in proposed or approved premiums for 2019. That compares to an average increase of 30% nationally for 2018.

According to Chris Sloan, a director at Avalere who co-authored the analysis, one of the factors that lead to the big difference year over year is that there were myriad forces pushing premiums higher for 2018. They include: insurers "silver-loading," general uncertainty about the future of ACA and the fact that insurers have struggled with pricing and sustained significant losses since the exchanges began.

Another factor is that seven states now have reinsurance programs, which allow insurers to price plans lower because those programs help pay a portion of insurers' high-cost claims.

There is also more competition among plans in 2019 than was seen in prior years, which can help lower premiums "or at least keep them flatter," Sloan says. Next year, 19 states are projected to see new health plan participation or expanded participation from health plans already operating in the state, according to the Avalere analysis.

Yet Cori Uccello, senior health fellow at the American Academy of Actuaries, says she is skeptical that the less-severe premium increases projected for 2019 will drive many more people to the ACA exchanges.

"On one hand, yes, you might see more individuals find insurance more affordable and maybe enter the market, but it's not clear that this would cause any seismic shift in enrollment numbers," she says. "If we see any more enrollment due to a reduction in premiums, it might be more so for the unsubsidized people."

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