Health insurers selling individual plans next year on the federally operated marketplace, HealthCare.gov, have until Wednesday to finalize their rates. But early filings provide a good look at how the ACA marketplace is shaping up for 2018.
Changes in benchmark silver plan premiums for 2018 range from an increase of 49% to a decrease of 5% from 2017 across 21 major U.S. cities where state regulators have published detailed information about insurers' preliminary rate requests, according to a Kaiser Family Foundation analysis released Thursday. In about half of those cities, premiums would go up less than 15%. In two cities, premiums would either decrease or stay the same.
The analysis also looked at premium changes over the last four years. Nashville, Tenn., experienced the steepest monthly premium increase from 2014 to 2018 at 28%. On the other hand, premiums in Providence, R.I., have dipped by 4% over the four-year period.
"Premiums increases have been pretty modest in many parts of the country," said Cynthia Cox, associate director at the Kaiser Family Foundation. In places where premiums are rising faster, many insurers initially set rates too low and later had to catch up with the rest of the nation, she said.
According to the analysis, 2018 monthly premiums for the second-lowest cost silver plan for a 40-year-old non-smoker would range from $244 in Detroit to $631 in Wilmington, Del., before taking into account premium tax credits.
In Detroit, that's an increase of just 3%. In Wilmington, premiums are rising by 49%—the steepest proposed increase of the cities analyzed.
Meanwhile, monthly premiums in Providence are set to fall by 5% to $248, while premiums in Burlington, Vt., will remain virtually unchanged at $491.
The silver plan is the most popular marketplace option, with 71% of exchange members enrolled in 2017. Because most enrollees receive the premium tax credits that are pegged to the silver plan, they will be protected from premium hikes, according to the analysis. The foundation noted that while the rates still must be approved by state regulators, requested premiums in the past have been similar to the rates insurers ultimately charge.
Most insurers submitted their initial rate requests in May and June in the midst of the Congressional Republican push to repeal the Affordable Care Act. Uncertainty surrounding the future of the healthcare law and the rules of the individual insurance market led the majority of health insurers to err on the side of caution and increase their rates to ensure they don't lose profit.
Insurers that assumed crucial cost-sharing reduction subsidies would not be funded in 2018 padded their premiums by as much as 23%. The Trump administration has threatened to pull funding for those subsidies, which help reduce the out-of-pocket healthcare costs for low-income marketplace enrollees.
Some other insurers added an extra 1% to 20% to their rates in case the individual insurance mandate isn't enforced next year. Insurers worry that without strong enforcement of the mandate requiring most Americans purchase insurance, enrollment in the marketplace would drop.
Some insurers, such as Aetna and Anthem, chose to reduce their participation or withdraw completely from the individual insurance market, citing financial losses and uncertainty in whether the cost-sharing subsidies would continue.
Across 20 states and D.C. included in the analysis, an average 4.6 insurers per state have indicated they plan to participate in the ACA marketplace in 2018. That's down from 5.1 insurers per state in 2017 and 6.2 in 2016.
Because insurers often don't sell plans across an entire state, it's likely that rural counties would have fewer insurers. There are currently 17 U.S. counties, mostly in rural Nevada, that lack a marketplace insurer for next year. Insurers have until September 27 to sign final contracts to sell marketplace plans in 2018.