PPACA World 2017: Rates might not be THAT bad

2. The typical individual health rate increase in a typical state may be in the “high single digits to the low double digits.”

Dillon estimates the general rate of increase could range from the high single digits to the low double digits, or about 7 percent to about 14 percent.

Increases of that size were common before PPACA rules took effect.

Increases of the kind Dillon is seeing might be disappointing to PPACA supporters who were hoping PPACA changes would hold down premium increases. But if Dillon is correct, the increases might also be disappointing to PPACA opponents who are hoping they can use reports of 50 percent and 100 percent premium increases against Democratic candidates in upcoming presidential and congressional election campaigns.

See also: Milliman: How PPACA World really worked in 2014

3. Any increase pressure resulting from pent-up demand for care may be easing.

Here’s how Dillon sizes up the individual health premium increase drivers:

• Increases in the underlying cost of medical care may add 5 percentage points to 6 percentage points to the typical premium increase.

• The end of the PPACA reinsurance program, which is supposed to use a broad fee on all carriers to help issuers pay the bills of individual enrollees with catastrophic claims, may add 3 percentage points to 4 percentage points to the typical increase.

• The end of the PPACA reinsurance program fee may cut the typical increase by 2 percentage points to 3 percentage points.

• A full understanding of what claims were like in 2014, and preliminary information about 2015 claims, could have an effect on premium increases that’s hard to estimate. 

Some insurers have said that individual health plan enrollees filed more claims in 2015 than they expected, and some say enrollees are filing more claims this year than they expected. But other insurers have said that claims for 2016 seem to be in line with expectations.

Uninsured consumers who got covered for the first time in 2014 may have been uninsured because they were too sick to qualify for commercial coverage under the pre-PPACA rules, and some consumers who got covered in 2014 or 2015 may have had a pent-up need for care that drove up claims early on, Dillon says.

Now that issuers understand the needs of the high-risk enrollees who got covered in 2014, and the percentage of previously uninsured enrollees with a pent-up need for care falls, those factors could help hold premium increases down, Dillon says.

But whether the current insured population is getting healthier or sicker may vary dramatically from carrier to carrier, Dillon says.

See also:

Many PPACA exchange plan enrollees use HIV drugs

CCIIO to state PCIPs: Take our deal or shut down

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