After suffering from years of losses, the U.S. health insurance industry figured out how make money in the individual major medical insurance in 2017, a new analysis shows.
The secret? Raising their prices.
The average cost of health insurance plans sold in the individual market climbed about 22% in 2017, as insurers boosted premiums well above what they spent on medical care. That left many in a profitable position for the first time since 2014, when major Affordable Care Act provisions went into effect, according to a Kaiser Family Foundation report released Thursday.
(Related: HealthCare.gov Signup Total Falls 4.5%)
Foundation analysts found that average gross margins per member per month increased to $78.52 in 2017, up from $14.36 in 2016, and up from $37.44 in 2013.
A copy of the full report is available here.
Foundation analysts included ACA-compliant major medical medical plans sold outside the ACA public exchange system as well as exchange plans.
Companies that have stuck with the program are facing fresh challenges. A law passed by Congress repealed the requirement that all people have health insurance, and the Trump administration has pushed to let companies offer health plans that don’t comply with the ACA’s rules.