HHS Touts Low Medical Claims Cost Growth in Health-Care Marketplaces

With large health insurers such as UnitedHealthcare, Aetna and Humana pulling back on their offerings in the Affordable Care Act marketplaces due to big losses on their plans, a lot of attention has been focused on the high cost of covering sick enrollees.

The Department of Health and Human Services fought back against that argument with a report finding that medical claim cost growth was essentially flat from 2014, the first year of the marketplaces, to 2015. In that same time period, the report said, per enrollee cost growth in other types of private health insurance rose 3 percent to 4 percent.

That’s an indication that more healthy people bought marketplace plans, which helped lower costs, HHS said.

HHS official Aviva Aron-Dine acknowledged that the report “is not an analysis of issuer finances.” Still, she said, “While a risk pool that is getting stronger does not guarantee issuer profitability, it is a very encouraging sign for the overall health of the marketplace as it continues to mature and continues to grow.”

Moreover, states that had above-average ACA enrollment growth in 2015 saw larger declines in costs, the report found.

Although the ACA risk pool appears to be improving, “actual claims may have been higher than what was expected” initially, said Cori Uccello, senior health fellow at the American Academy of Actuaries.

Premiums for 2017 ACA plans are expected to rise more than they did in 2015 and 2016 as one of the ACA programs that helps cover insurers that incur high-cost claims ends at the end of this year and insurers try to raise rates to stem losses they incurred in the first two years. An analysis of premium filings in major cities by the Kaiser Family Foundation forecast that the cost of benchmark plans on which government subsidies are based will increase 9 percent in 2017.

The full story is at http://www.bna.com/medical-costs-aca-n73014446278/.

Stay on top of new developments in health law and regulation with a free trial to the Health Law Resource Center. Learn more about Bloomberg Law and sign up for a free trial.