Insurance companies are beginning to decide what they’ll charge and whether to participate on the Affordable Care Act (ACA) exchanges for 2019, with Matt Eyles, the next CEO of America’s Health Insurance Plans (AHIP), saying it’s “not a pretty picture right now” for individual market insurers.
Speaking at a Boston event hosted by The Atlantic, Eyles and Ceci Connolly, president and CEO of Alliance of Community Health Plans, both said they were disappointed by Congress failing to pass an ACA stabilization package with funding for reinsurance and the law’s halted cost-sharing reduction subsidies. The lack of congressional action, when combined with the elimination on the individual mandate penalty and efforts to expand the availability of non-ACA-compliant plans will result in hefty hikes in premiums to companies to stay in the ACA market.
“It’s just still a nasty soup right now that’s brewing and we’re looking ahead to 2019, and it’s not a really great picture right now,” Eyles said.
Insurers could hike premiums by up to 30 percent for 2019, after an average increase of 34 percent for silver-level plans for 2018. Despite the steeper cost, enrollment on the ACA exchanges dropped by only 3 percent this year. Eyles said the hardest-hit customers will be the pool of exchange shoppers who make too much money to qualify for premium support subsidies.
Some help for insurance markets has come from the states, with Connolly mentioning Massachusetts’ existing individual mandate and its own version of CSRs as example other states can follow while federal action appears unlikely.
“At least in a state like Massachusetts, you’re seeing a lot of ideas over many, many years and a lot of pilots and demonstrations,” she said.
Other states have also taken actions to work around the ACA, such as Iowa’s new law allowing non-ACA-compliant plans to be sold through the Iowa Farm Bureau.
The main issue both Eyles and Connolly said insurers are grappling with is uncertainty around the ACA markets for next year, especially with the risk pool expecting to worsen without the individual mandate penalty and the possibility of younger, healthier customers picking options like association health plans and short-term insurance.
Former CMS Administrator Andy Slavitt, however, pointed out some insurers are benefiting from the current market conditions that have many counties being served by only one exchange insurer. Greater competition—and with it, lower premiums—could be achieved, he said, if the Trump administration signaled to the insurance industry it wouldn’t try to “mess” with the ACA.
“Many Congresses before me got to decide what laws I implemented and I never once woke up and thought: ‘Do I like this law? Do I not like this law? Do I want to implement it? Do I want to undermine it?’” Slavitt said. “That just wasn’t my job and quite honestly, it’s not theirs. Having said that, it creates a lot of uncertainty for these guys and the companies they represent because every day, they don’t know what to expect.”