Analysis of health plans in the Affordable Care Act (ACA) Marketplace reveals factors like health cost trend could drive higher costs for 2023.
Health insurance premiums in the ACA Marketplace are expected to be a lot more costly in 2023, according to joint research by The Peterson Center on Healthcare and Kaiser Family Foundation.
The analysis reviewed 72 insurers and found a median proposed premium increase of 10%, with only four of the payers filing negative premium changes and the remaining 68 insurers requesting premium increases.
Most of the insurers are requesting premium changes that fall between 5% and 15%, while 19 payers are between 0% and 5%, and eight are at least 20%.
While most of the insured population is enrolled in employer plans, the relatively small percentage enrolled in ACA Marketplace plans is at its highest. Based on a report by HHS, a record 14.5 million people signed up for coverage through the Marketplace during the 2022 special enrollment period, a 21% increase from the previous year.
While individuals with Marketplace plans should brace for costly changes, researchers of the study note that the premium increases are preliminary and the actual rates will not be known until the fall as data for every state is not yet available. The analysis compiles data from insurers across 13 states and the District of Colombia: Georgia, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, New York, Oregon, Rhode Island, Texas, Vermont, and Washington.
Researchers found that a large chunk of the premium increases stem from rising health prices and utilization of healthcare. Insurers project their health cost trend—a combination of prices paid to hospitals, doctors, and pharmaceutical companies, along with the increase of decrease in use of services —to be 4% to 8% for 2023.
As far as the impact of the COVID-19 pandemic, about half of the insurers reviewed publicly quantified the pandemic's effect on premiums, with most saying it would only have an impact of plus or minus 1%.
Meanwhile, just under half of the payers reviewed quantified an impact of the American Rescue Plan Act subsidies expiring on premium changes. Of those, about half said the expiration would have a neutral effect, with the other half saying it would have a slight upward impact on costs, but no more than around 1%.
Only a couple insurers pointed to the No Surprises Act going into effect, and only one payer mentioned the Family Glitch implementation, showing that policy changes as a whole are having little impact on premium changes.
Jay Asser is the contributing editor for strategy at HealthLeaders.