Inflation expected to hit ACA Marketplace medical insurance premiums for 2023

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Preliminary price forecasts could hint at industry trends for coming yr.

Inflation could push up medical insurance costs “significantly” for 2023, in line with a survey of insurers participating within the Reasonably priced Care Act (ACA) Marketplaces.

Amongst 72 insurers in 13 states and the District of Columbia, the median proposed premium increase is 10%, in line with the study, “An early have a look at what’s driving health costs in 2023 ACA markets,” published July 18 by analysts The Peterson Center on Healthcare and KFF.

ACA Marketplace plans cover a comparatively small number of individuals in comparison with employer-sponsored plans, however the ACA Marketplace insurer trends could hint at similar premium changes across the medical insurance sector.

“The fundamental contributor to premium growth is health cost trend, which reflects rising prices paid to providers and pharmaceutical corporations in addition to a rebound in utilization,” the study said. “While our evaluation focuses on the ACA markets, the fundamental premium drivers we identified (prices and utilization) are systemic and never specific to the ACA markets.”

Of 72 insurers, 4 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 greater than 25%.

Health care prices are a fundamental driver for insurance premiums, but “there may be potential for general economic inflation to flow through to the health sector” for the 2023 premiums. Not less than one Recent York health plan warned of an imminent market correction “as labor and provide cost increases directly impact hospitals and physician offices,” the study said.

While most ACA Marketplace insurer mentioned the COVID-19 pandemic, people who quantified an effect estimated it could have a small effect on premiums, generally plus or minus 1% to 2%. They predicted more patients are more 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 coverage, and when insurance firms implement the No Surprises Act. However the insurers forecasted those changes would have little, if any, effect on premium prices, in line with the study.

The study noted insurers don’t all the time publicly quantify all aspects affecting premiums. The newest public findings are preliminary and will change in the course of the review process, with final rates expected in late summer.

The states within the review were Georgia, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Recent York, Oregon, Rhode Island, Texas, Vermont, and Washington.

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