Yesterday Avalere Health published a report on premium increases for 2018 and came up with an average 34% increase for silver plans, which are by far the most popular. A significant contributor to that increase (~14%) is President Trump’s decision to cut off cost-sharing payments to insurers. If not for that factor the rate increase would likely be closer to 20 percent.
“Plans are raising premiums in 2018 to account for market uncertainty and the federal government’s failure to pay for cost-sharing reductions,” said Caroline Pearson, senior vice president at Avalere. “These premium increases may allow insurers to remain in the market and enrollees in all regions to have access to coverage.”
Avalere produced this graph showing average premiums over the past three years plus the average price for next year broken down by plan type (bronze through platinum):
The company also predicts that prices on silver plans could go up beyond 34% if insurers who proposed rates prior to the CSR cut off are given a second chance:
States where health plans were not permitted to provide an amended or second set of rates assuming the loss of CSRs may permit health plans to refile their rates prior to 2018 open enrollment, due to the elimination of the CSR payments. In states where this occurs, it is expected that the newly updated rates will be substantially higher for the 2018 plan year.
That’s exactly what is going to happen in Maryland where insurers are being given a chance to revise their rates. From the Washington Post:
Maryland regulators have given two insurance carriers permission to substantially raise monthly premiums on some plans in a direct response to a Trump administration decision to halt certain subsidies under the Affordable Care Act.
The steep increases will raise costs by as much as 76 percent over last year for silver-level individual plans on the state exchange and come atop already approved increases for 2018.
As usual, there are all sorts of caveats here. For one, most of the people buying these plans on the exchange get subsidies which means they won’t see much of this increase (the taxpayers will). The people who will be hit hard by this are those, mostly buying off the exchange, who make too much to receive subsidies. As you can see in that chart above, the average price of a silver plan premium could jump almost $200 a month next year.
The real problem, which is mentioned in a list of factors by Avalere, is that enrollment was down this year and will probably be down again, perhaps sharply, next year. That will lead to more insurers considering dropping out of the markets. About a quarter of all counties next year are already down to one insurer and those are the counties where insurers are most likely to want to drop out. That and the shrinking size of the risk pool could lead to another round of steep premium hikes next year.