Last week, HHS released data showing more than 8 million people have signed up for health plans through the Patient Protection and Affordable Care Act exchanges, surpassing the Congressional Budget Office’s initial projection of 7 million for the first year. Although enough young, healthy people (28 percent of the enrollee population) signed up for coverage through the exchanges to prevent age distribution from driving premium increases, “secular increases in the cost of medical care and in utilization of services and new medical technology make it likely that exchange plans will need to increase their prices,” according to Avalere’s analysis.
“While the exchange markets are likely to remain competitive, and the demographic mix of enrollees has been within tolerance limits, these factors will not compensate for increases in costs in health markets,” the report states. “Premium increases will vary geographically, and will depend in part on the competitiveness of provider markets.”
Last month, Kasier Health News reported health insurers were looking to raise rates next year for health plans offered through the exchanges. Dave Axene and Elaine Corrough, fellows of the Society of Actuaries, have offered a less drastic estimate than Avalere, saying health insurers will likely increase rates by 6 percent to 8.5 percent on average. Although rates will vary widely across the country, Ms. Corrough and Mr. Axene predicted medium-sized single-digit rate increases, based on medical inflation and the exchange enrollee population.
Insurers offering plans through the federal exchange must file initial rate requests by late May or June.
More Articles on Health Insurance Premiums:
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