Possible expiration of pandemic-era measures among drivers of 2023 health insurance premium changes
WASHINGTON, June 22, 2022
WASHINGTON, June 22, 2022 /PRNewswire/ — The American Academy of Actuaries has released a public policy briefing that indicates the possible expiration of two landmark pandemic-era measures that have bolstered affordability and health coverage. health insurance among drivers of potential premium changes for individuals and small groups projects in 2023.
“The proposed health insurance premium rates reflect many factors, which may include the effects of legislative and regulatory changes,” said Cori Uccello, Academy senior health researcher. “This is especially true for 2023 rates, due to the possible expiration later this year of the Affordable Care Act (ACA) enhanced premium subsidies and key support for Medicaid coverage during the pandemic. “
The briefing note, developed by the Academy’s Individual and Small Group Markets Committee, Drivers of health insurance premium changes in 2023discusses these and other key factors that may explain differences in premium rates filed with state insurance departments this year for 2023, compared to rates for 2022. The factors are also illustrated in a new infographic.
The US Bailout Act of 2021 (ARPA) increased advanced ACA premium tax credits in 2020 and 2021 for all eligible income brackets, including extending tax credits to those earning more than 400% of the federal poverty level . These subsidies, which make the plans more affordable, are set to end when ARPA expires on January 1, 2023reversing enrollment gains and possibly worsening the plan’s risk pools.
Provisions in the Families First Coronavirus Response Act (FFCRA) has increased federal tax assistance to states to cover Medicaid enrollees during the pandemic-related public health emergency (PHE), subject to states suspending their usual processes for redetermining eligibility for Medicaid coverage. These provisions are due to expire at the end of the quarter in which the PHE is not renewed, which could happen this year. In this case, states could restart the usual review process, which means some people who received Medicaid coverage during the pandemic may no longer be eligible for Medicaid and move to the individual market, employer group markets or becoming uninsured – a change that could affect risk pools in the retail and small group markets.
Other factors expected to drive premium rate changes for 2023 include changes in the composition of the small group market due to the continued shift of small employers to self-funded, level-funded, or other risk-rated coverage. risk, or otherwise exit the market; changes in patterns of use of telehealth visits and mental health care; and changes in contracts with providers, including the expected impacts of medical inflation. The costs of preventing, testing and treating COVID-19, while expected to stabilize, could also be important drivers for some health insurance plans, depending on projected pandemic trends, particularly if a new variant was emerging that is not attenuated by the immunity provided by previous infections or vaccinations. State-level measures such as reinsurance programs to reduce premiums could also reduce premiums, with an outsized reduction in the first year of new reinsurance programs.
Learn more about the Academy’s work in health policy under the public policy tab on actuary.org.
The American Academy of Actuaries is a professional association of more than 19,500 members whose mission is to serve the public and the actuarial profession in the United States. For more than 50 years, the Academy has assisted public decision-makers at all levels by providing them with leadership, objective expertise and actuarial advice on issues of risk and financial security. The Academy also sets standards of qualification, practice and professionalism for actuaries in United States.
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