1. Premiums in 2018: What to Expect
Commonwealth Fund Teleconference
June 12, 2017

2. Sara Collins, Ph.D. Vice President, Health Care Coverage and Access
Marketplace Premiums and Insurer Participation: 2017 Experience and 2018 Projections
Sara Collins, Ph.D.
Vice President, Health Care Coverage and Access
Commonwealth Fund Teleconference: Premiums in 2018: What to Expect
June 12, 2017
There has always been uncertainty WRT

3. EXHIBIT 1
Percent Change in Average Monthly Premium for Second-Lowest Cost Silver Plan for a 27-Year-Old,
Percent Change
No Medicaid Expansion
Medicaid expansion
State-based exchange
Median = 20%
Source: The Commonwealth Fund and NORC analysis of the Robert Wood Johnson Foundation’s HIX Compare dataset

4. Counties With One Insurance Carrier, 2017
EXHIBIT 2
Counties With One Insurance Carrier, 2017
Source: A. Semanskee and C. Cox, “Insurer Participation on ACA Marketplaces, ” Kaiser Family Foundation,
June 1, 2017

5. 2017 Premium Increases Likely a One-Time Correction
EXHIBIT 3
2017 Premium Increases Likely a One-Time Correction
Reinsurance program phased out: Temporary program for three years, to reimburse insurers for the cost of individuals who have unusually high claims.
Risk pools became known: Insurers had more knowledge about enrollees after 3 years and adjusted prices.
Under pricing in 2016: Many markets with the largest increases had below average prices in 2016.
Commonwealth Fund Teleconference | June 12, 2017

6. 2017 Markets with One Insurer: Key Factors
EXHIBIT 4
2017 Markets with One Insurer: Key Factors
Stiff price competition.
Risk corridor payments curtailed.
Consolidation pre-ACA.
Low enrollment in some markets
Rural status
State approach to outreach and enrollment.
Commonwealth Fund Teleconference | June 12, 2017

7. S&P Projections for 2017 Individual Market, April 2017
EXHIBIT 5
S&P Projections for 2017 Individual Market, April 2017
Signs of improvement, with most insurers reporting better 2016 results compared to 2015.
2016 and 2017 enrollment indicate that the ACA individual market is not in a “death spiral.”
Insurers on average will report closer to break-even margins in 2017.
Source: Deep Banerjee “The U.S. ACA Individual Market Showed Progress in 2016, But Still Needs Time to Mature,” S&P Global Market Intelligence (Apr 2017).

8. S&P Projections for 2018 Individual Market, April 2017
EXHIBIT 6
S&P Projections for 2018 Individual Market, April 2017
2018 premiums are projected to increase by far less than in 2017.
Most counties will have at least 1 insurer in the marketplaces.
More insurers will report positive (low single-digit) margins.
ACA individual markets remain in early stage of development: they need certainty to stabilize.
Source: Deep Banerjee “The U.S. ACA Individual Market Showed Progress in 2016, But Still Needs Time to Mature,” S&P Global Market Intelligence (Apr 2017).

9. EXHIBIT 7
2018 Individual Health Insurance Market Rate Filings Cori E. Uccello, MAAA, FSA, FCA, MPP Senior Health Fellow American Academy of Actuaries
Commonwealth Fund Briefing: 2018 Health Insurance Marketplaces—What States, Insurers, and Consumers Should Expect
June 12, 2017

10. Premium components Who is covered – the composition of the risk pool
EXHIBIT 8
Who is covered – the composition of the risk pool
Projected medical costs
Other premium components—administrative costs, taxes, profit
Laws and regulations

11. Major drivers of 2018 premium changes
EXHIBIT 9
Underlying growth in health care costs (medical trend)
Changes in the risk pool composition and insurer assumptions
Impact of recent regulatory changes (e.g., shortened open enrollment period, tightened SEP verification requirements)
Legislative and regulatory uncertainty
Whether cost-sharing reductions (CSR) will continue to be funded
Whether the individual mandate will continue to be enforced
Whether a state has implemented a reinsurance or high-risk pool program
Resumption of the health insurance tax

12. EXHIBIT 10
What is necessary for a stable and sustainable individual health insurance market
Individual enrollment at sufficient levels and a balanced risk pool
Stable regulatory environment that facilitates fair competition
Sufficient insurer participation and plan offerings to provide insurer competition and consumer choice
Slow spending growth and high quality of care

13. Recent Academy publications
EXHIBIT 11
Drivers of 2018 Health Insurance Premium Changes (forthcoming)
Steps Toward a More Sustainable Individual Health Insurance Market
An Evaluation of the Individual Health Insurance Market and Implications of Potential Changes
Using High-Risk Pools to Cover High-Risk Enrollees

14. 2018 Health Plan Rate Submissions: Effects of Policy Uncertainty
EXHIBIT 12
Commonwealth Fund
Teleconference
2018 Health Plan Rate Submissions: Effects of Policy Uncertainty
June 12, 2017
Sabrina Corlette, J.D.

15. Running Down the Clock: Effects of Policy Uncertainty
EXHIBIT 13
Running Down the Clock: Effects of Policy Uncertainty
Rate Review: A Key Consumer Protection
State rate review: purpose & scope
The rate review calendar
Flexible, within limits
Risks and benefits for consumers

16. Early rate filings: What are insurers saying?
EXHIBIT 14
Early rate filings: What are insurers saying?
Impact of policy uncertainty
Premium adjustments
CSRs
Individual mandate enforcement
“Awareness” of insurance options
Participation at risk

17. Future of the ACA’s Marketplaces
EXHIBIT 15
Consequences for consumers
Reduced choices
Higher prices
Worst case: no coverage at all

18. EXHIBIT 16
Thank you!
Sabrina Corlette, J.D. Research Professor Georgetown University Center on Health Insurance