Approved double-digit rate hikes for individual Affordable Care Act marketplace plans continue to mar headlines as open enrollment for 2017 approaches.
While government officials and industry leaders insist average rate increases presented in headlines do not reflect actual consumer costs, premium increases are testing the ACA's efficiency in stabilizing the insurance market, The Wall Street Journal reports.
Below are five observations about why premium increases are testing the ACA.
1. This week Illinois regulators announced premium rate hikes averaging 45 percent, and Pennsylvania's insurance department said premiums will increase an average 32.5 percent for 2017. In Pennsylvania and Illinois, as well as Montana, Oklahoma and Tennessee, leaders in the health insurance market were approved increases topping 50 percent, according to the report.
2. While the majority of the 10 million individuals covered through an exchange plan receive subsidies to offset premiums, up to 9 million other consumers who purchase individual coverage off the exchange are not eligible for subsidies and face substantial increases.
3. High premiums and fewer plan options may deter low-risk enrollees from ACA marketplace coverage, leading costs to continue to rise.
4. Alissa Fox, senior vice president of the office of policy and representation for the Blue Cross Blue Shield Association, told WSJ, "The situation is serious," and "the people we are covering have serious conditions and they're using a lot of medical services because of their chronic illnesses. That's clear. And there's not enough young, healthy people to balance out those costs."
5. Federal leaders have said this year is a transitory time for the health law, as insurers previously priced plans too low and are now implementing increases. Official said they will target their ACA plan enrollment outreach toward healthier enrollees and those eligible for subsidies in an effort to stabilize the market.
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