Weeks after the collapse of the attempt to repeal and replace the Affordable Care Act, uncertainty around federal action is affecting premium rates and continues to unsettle the health insurance industry.“The continued uncertainty is making it very difficult for carriers,” said New Jersey Association of Health Plans president Ward Sanders.
In two recent reports, from the Kaiser Family Foundation and the Stop the Health Insurance Tax Coalition lobbying firm, premiums are estimated to increase by hundreds of dollars for New Jerseyans.
According to Stop the HIT, with the reintroduction of the premium fee:
- Individuals will see an increase of at least $178.
- Small group plans will increase by $209 for individuals and $556 for families.
- Large groups will see an increase of $207 for individuals and $615 for family.
- Seniors and disabled individuals in Medicare Advantage will see their premiums increase $516 per couple (or $248 for every individual).
- State Medicaid programs will incur an additional cost of $268 for each of their insured Medicaid enrollees in 2018.
“From what we’ve seen from other state filings (as highlighted in the KFF report), the cost sharing reduction payments, if they are not going to be there, it is going to have a significant impact on insurance premiums,” Sanders said.
Whether or not the individual mandate and federal subsidies are kept intact, plus the reintroduction of the premium fee on insurers — which alone will increase premiums by close to 3 percent — are forcing significant increases for 2018 plans.
If subsidies are cut off for marketplace enrollees and the individual mandate is removed, insurers are likely to see fewer (mostly healthy) enrollees and therefore need to increase premiums.
“(Insurers) can run their anticipated rates with different assumptions,” Sanders said.
But usually the known factor is the law.
“They don’t know what the law is,” he said. “They are still in a holding pattern.”
While the individual mandate is still in the books, how it is enforced by CMS impacts who buys health coverage and who doesn’t, which in turn affects the risk pool and the pricing of health insurance plans.
Which means insurers are guaranteed to price higher for the upcoming year.
If the federal government makes no changes.
“It’s a real game of chicken,” Sanders said.