Preliminary price forecasts could hint at industry trends for coming year.
Inflation could push up health insurance costs “significantly” for 2023, according to a survey of insurers participating in the Affordable Care Act (ACA) Marketplaces.
Among 72 insurers in 13 states and the District of Columbia, the median proposed premium increase is 10%, according to the study, “An early look at what is driving health costs in 2023 ACA markets,” published July 18 by analysts The Peterson Center on Healthcare and KFF.
ACA Marketplace plans cover a relatively small number of people compared to employer-sponsored plans, but the ACA Marketplace insurer trends could hint at similar premium changes across the health insurance sector.
“The main contributor to premium growth is health cost trend, which reflects rising prices paid to providers and pharmaceutical companies as well as a rebound in utilization,” the study said. “While our analysis focuses on the ACA markets, the main premium drivers we identified (prices and utilization) are systemic and not specific to the ACA markets.”
Of 72 insurers, four had negative premium changes and 68 requested premium increases. Most increases fell between 5% and 14%, but three requested increases of 20% to 25%, and five will seek premium increases of more than 25%.
Health care prices are a main driver for insurance premiums, but “there is potential for general economic inflation to flow through to the health sector” for the 2023 premiums. At least one New York health plan warned of an imminent market correction “as labor and supply cost increases directly impact hospitals and physician offices,” the study said.
While most ACA Marketplace insurer mentioned the COVID-19 pandemic, those that quantified an effect estimated it would have a small effect on premiums, generally plus or minus 1% to 2%. They predicted more patients are likely to return to hospitals and physician offices for care, with COVID-19 treatment costs would go down, but future vaccine and booster costs increasing.
Two major federal policy changes are coming when the American Rescue Plan Act expires, eliminating subsidies that allowed some people to enroll in insurance plans, and when insurance companies implement the No Surprises Act. But the insurers forecasted those changes would have little, if any, effect on premium prices, according to the study.
The study noted insurers do not always publicly quantify all factors affecting premiums. The latest public findings are preliminary and could change during the review process, with final rates expected in late summer.
The states in the review were Georgia, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, New York, Oregon, Rhode Island, Texas, Vermont, and Washington.