I seldom write about the Affordable Care Act and the subject of insurance. It is just not my thing. But I read an article in Modern Healthcare, written by healthcare reporter Shelby Livingston, that indicated that the year 2019 may be very expensive.
Double-digit premium increases
Insurance companies are starting to put in requests for rate hikes with state governments. Livingston reports that Maryland and Virginia have already announced the requested rates from the insurance companies for the ACA marketplace. Livingston says:
In Maryland, the two insurers selling individual insurance plans on the ACA marketplace are asking for an average rate increase of about 30% for 2019 coverage. That would amount to an average monthly premium of about $592 per member, compared with $449 per month in 2018.
In Virginia, the rate picture is more varied with Livingston reporting:
Virginia insurers asked for a wide range of rate increases. CareFirst is seeking a 26.6% rate hike for its HMO plans in the state, and 64.3% for its PPO plans for the same reasons as its Maryland rate increase requests….Cigna Corp. filed for a 15% increase; Kaiser asked for a 32.1% increase for its individual plans; and Piedmont Community HealthCare requested an 18.3% rate increase.
Not all insurers in Virginia are increasing substantially. According to Livingston “Anthem’s HealthKeepers subsidiary asked to increase 2019 rates for its on- and off-exchange plans by 5.6% on average, while Optima is seeking to lower rates by an average 1.9%.”
Why the increases?
A number of factors have lead to these requests. First, the pool of people using the insurance has fallen in size and have become sicklier. Healthier people have opted to not take coverage, rolling the dice on becoming ill as opposed to paying expensive premiums. Second, there is still a lot of uncertainty about where the ACA is headed, and uncertainty means higher prices, in almost everything. Livingston said:
Though repeal efforts fell flat, questions remain about how many people will enroll in individual coverage in 2019 and how sick and costly that population will be. The elimination of the individual mandate penalty and the extension of short-term medical plans to a maximum of 364 days will likely be the biggest drivers of 2019 rates.
Ms. Livingston concludes her article by saying “The Congressional Budget Office projected that premiums for the most popular silver plans on the ACA exchanges would jump an average 34% next year.” So everyone who is covered by the ACA should expect some sort of increase in their premiums next year. Many of my consultant friends and gig economy workers may be hit hard.