2018 Obamacare Premiums May Rise 10 Percent to 20 Percent


Early indications are that Obamacare premiums for 2018 may increase by at least 10 percent to 20 percent.

That is the estimate made by Dave Dillon, a fellow with the Society of Actuaries, and it’s also the range indicated by half of the 24 payers responding to an Oliver Wyman survey conducted in early April. A quarter of the payers in the survey were planning a rate increase less than 10 percent and 25 percent were planning an increase above 20 percent.

The average rate increase in 2017 in the Affordable Care Act marketplaces was 22 percent, so another year of big increases would hit individual market enrollees who don’t receive subsidies particularly hard.

Premium filing dates vary among states, but the federal deadline for many plans is June 21.

Most carriers that are in the 2017 exchanges are planning to participate in 2018, but they have until the fall to make a final decision, Dillon and Oliver Wyman actuary Beth Fritchen told me.

“It will be highly variable,” Dillon said. “Some carriers did well. Some didn’t,” and that will have an impact on whether they ask for larger or smaller rate increases, he said.

Another report, from S&P Global Ratings, found that “2016 was a marked improvement for most U.S. Blue Cross Blue Shield (Blues) insurers’ operating performance in the Affordable Care Act (ACA) individual market. But target profitability is still a couple of years away.”

Blue Cross Blue Shield plans have largely been the stalwarts in participating in the exchanges, but large commercial insurers—UnitedHealth Group Inc., Aetna Inc. and Humana Inc.—have pulled back due to losses on exchange plans. Wellmark Inc., a Blue Cross Blue Shield plan, also recently announced it was leaving the Iowa market.

A wild card is whether Congress will appropriate cost-sharing subsidies for low-income enrollees, which are estimated by the Congressional Budget Office to be $7 billion in fiscal 2017 and $10 billion in fiscal 2018.

If insurers don’t receive the subsidies, premium increases could be higher.

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