Health Coverage Rates May Be Stable in 2022: Actuary

Actuary Dave Dillon is predicting that health insurance prices will stay about the same in 2022.

Dillon — a fellow of the Society of Actuaries (SOA), an SOA board member and a senior vice president at Lewis & Ellis, an actuarial consulting firm — wrote in a recent commentary that typical premiums could range from 5% lower than they are this year to 5% higher.

But Dillon said some markets could look different from others.

“Consistent with previous years, insurance rates will vary widely across individual states and marketplaces,” Dillon said.

Health insurers in some states will start filing their 2022 major medical insurance rate proposals with rate regulators June 4.

Dillon sees what’s happening to rates when he helps health insurers design products, as well as from state insurance regulators and from colleagues at the SOA.

Here’s how he’s weighing the effects of three market forces:

• The new, temporary health insurance premium subsidies in the American Rescue Plan Act of 2021: May cut rates 1% to 4%, by keeping younger and healthier people in the pool of people have health insurance.
• Underlying medical inflation: May increase rates by 4% to 6%.
• COVID-19: The pandemic could cut rates by as much as 5% or increase them by as much as 5%, due to some combination of COVID-19 care costs, the effects of the COVID-19 on demand for other services and the extent to which pandemic-related delays in use of routine care have led some people to develop expensive-to-treat conditions.

Dillon said wild cards include the possibility that more small employers could drop health coverage; changes in the federal risk-adjustment program for commercial health insurers; and the possibility that the U.S. Supreme Court could knock out some or all of the Affordable Care Act with a ruling on California v. Texas, a case involving a dispute over whether the ACA is constitutional.

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