Individual Markets Nationally Face High Premium Increases in Coming Years Absent Federal or State Action, With Wide Variation Among States

From Covered California, March 8, 2018

Executive Summary Every state is at risk of significant cumulative premium increases in 2019-2021 due to continued federal uncertainty in the individual market. The uneasy conditions in many states have been exacerbated by recent decisions made at the national level, such as the removal of the federal penalty for being uninsured; the introduction of association health plans and short-term, limited duration plans that could promote higher costs and the siphoning of healthy consumers; and the potential of continued underinvestment in marketing and outreach to consumers eligible for coverage in those states that rely on federal marketplace.

(Translation: Obamacare prices will continue to soar.  But now its all Trump’s fault, LOL!)

A new Covered California analysis finds that absent any federal policy action, premium increases for every state could range from 12 to 32 percent in 2019, with cumulative increases from 2019-2021 potentially ranging from 35 to 90 percent.

Health care is local, and conditions and market environments are unique to each state. There are, however, key indicators of a state being more likely to be on the high or low range of the forthcoming premium increases. The two factors reflected in this analysis are the 2016 risk mix of the state and the trend in marketplace enrollment from 2017 to 2018. The report also includes data on other factors that provide important context regarding each state’s situation, including the percent of consumers with more than one insurer option and the premiums consumers pay for individual market coverage in those states. Based on this analysis, 17 states could be at a higher risk of experiencing cumulative premium increases of 90 percent or more, and 19 states could be at a higher risk of experiencing hikes of 50 percent.

Highlights:

• All states’ individual markets risk higher than normal premium increases — ranging from 35 to 90 percent over three years — due to continued uncertainty at the federal level, but state variation informs understanding of local risks.

• Premium increases in the individual markets will likely range from 12 to 32 percent in 2019, and cumulative increases from 2019-2021 will range from 35 percent to more than 90 percent.

• Increases are on average more than double the rate of medical inflation as a result of healthier consumers leaving the individual market.

• The report identifies 17 states that are more likely — because of their historic risk mix and enrollment — to have cumulative premium increases of 90 percent or more and 19 additional states are at a higher risk of experiencing hikes of 50 percent.

• Policy actions could both lower premiums and promote more plan competition by reducing uncertainty — with independent actuarial analysis finding that reinsurance or similar programs could cut premium increases in half, bringing them to single digits in many states.

read … Full Report

SoR: States face significant premium increases over next three years “States with projected ‘High’ increases are spread somewhat evenly across the country and include Hawaii, Arizona and Alaska. ‘High’ means possible 50% premium increase by 2021.”

Related: Hawaii AG Sues Trump in Desperate Bid to Keep Health Insurance Expensive