Insurers seek higher premiums for ACA plans

Health insurance premiums are set to jump for people and small businesses shopping for policies offered under the Affordable Care Act in 2023.

  • Insurers are asking for an average increase of 7.1% on individual policies and 5.2% on policies for small groups, according to the Pennsylvania Insurance Department, which has to sign off on the premium changes before they take effect.
  • The increases could come as a shock to some, particularly individuals, who saw an average hike of 0.2% for individual policies sold this year

Why is this happening: A mix of factors, according to state insurance regulators.

  • One is higher health care costs, which have been exacerbated by inflation.
  • Another factor is the cost of care that was deferred during the Covid-19 pandemic, when people avoided health care settings for fear of infection and hospitals had less capacity to care for non-Covid patients. That bill is still coming due.
  • A third factor is the end of subsidies to help people pay for insurance premiums under the ACA. 
  • The subsidies were enacted under the American Rescue Plan but are set to expire at the end of this year, which could potentially shrink the market for ACA plans.
  • The subsidies would continue under a broader bill now in Congress — the one negotiated by U.S. Sens. Chuck Schumer of New York and Joe Manchin of West Virginia.
  • The bill’s future appears to rest now with Sen. Kyrsten Sinema of Arizona, according to Bloomberg.

What are the details: Some insurers are seeking double-digit hikes while others are proposing double-digit cuts.

  • Aetna Health, for example, is asking for a decrease of 32.19% on small-group policies, while Geisinger is looking for a hikeof 27.47% for certain individual plans, according to data from the insurance department.
  • The biggest increases on the small-group market are being requested by UPMC-related health plans.
  • They are seeking increases of between 10.82% and 12.59%.
  • Harrisburg-based Capital Blue Cross is seeking a 9.12% increase for small-group plans and a 12.26% increase for individual plans.
  • “The healthcare industry as a whole is experiencing rising costs of care and utilization of healthcare services, in part due to people seeking care that was deferred during the pandemic, and our proposed rates are impacted by these factors,” Capital Blue Cross spokesperson Jerry Reimenschneider wrote in an emailed statement. “Despite these challenges, Capital Blue Cross remains focused on continuing to offer quality, affordable coverage that prioritizes the health and wellness of our members.”
  • A spokesperson for Highmark noted that its requests for higher rates reflect the estimated cost of care for its ACA members in 2023. The Pittsburgh-based insurer has about 90,000 ACA enrollees, up from 57,000 in 2020.
  • “Over the last two years, enrollment in ACA plans has grown by over three million across the country,” spokesperson David Golebiewski wrote in an emailed statement. “We celebrate these historic gains made since the passage of the American Rescue Plan, and believe it is essential that Congress moves swiftly to protect this public health victory by extending enhanced ACA subsidies beyond this year.”
  • Efforts to reach UPMC, Geisinger and Aetna were not successful.

What’s next: The insurance department has invited the public to comment on the proposed hikes. Comments are due Aug. 31.

  • The department typically finalizes the requests in early October, in time for enrollment in November.
  • Nearly 375,000 state residents bought health coverage through Pennsylvania’s official ACA marketplace, Pennie, up 11% from 2021.

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