Key Takeaways
Health insurance providers are already starting the process of
making decisions about market participation, product offerings,
and pricing for the 2019 plan year.
The individual market faces challenges including high premiums
and high premium increases, fewer plan choices for many
consumers, lower-than-projected enrollment, and risk pool
challenges in certain states and markets.
Members of Congress and the Administration have a short
opportunity to enact legislation that would put strong downward
pressure on premiums in 2019, 2020 and beyond.
Background
As of January 31, the 2018 open enrollment period for the individual market has closed nationwide. This includes states with extended open enrollment periods, such as California and New York. Given the timelines for product development and rate filings, health insurance providers are already starting the process of making decisions about market participation, product offerings, and pricing for the 2019 plan year.
Based on data from the Centers for Medicare & Medicaid Services (CMS), over 8.8 million consumers made a plan selection for coverage through healthcare.gov—a 5 percent decrease in plan selections from 2017. By contrast, preliminary data from state-based marketplaces suggest that plan selections for 2018 may exceed 2017 rates.
Actual enrollment data for 2018 will not be known until later this year. However, the key reason that 2018 enrollment appears to be on par with or greater than 2017 is the availability of federal premium assistance. These advance premium tax credits, or APTCs, make coverage affordable for low- and moderate- income individuals and families. This assistance is higher for individuals and families making less than 300 percent of federal poverty (FPL), but are available up to 400 percent FPL for those who lack access to affordable coverage through an employer.
For many well-documented reasons, the individual market continues to face stability challenges in its fifth year under the market reform rules of the Affordable Care Act (ACA). These challenges include high premiums and high premium increases, fewer plan choices for many consumers, lower-than-projected enrollment, and risk pool challenges in certain states and markets. Moreover, recent policy actions and other proposals may exacerbate current market instability and place greater upward pressure on premiums for 2019. Amid this uncertain environment, this brief examines the key factors affecting individual market premiums in 2019 and policy solutions that could slow or potentially reverse premium increases in 2019 and beyond.