Pandemic-era programs, which increased health insurance affordability and coverage, may have resulted in increased premiums for individual and small group plans in 2023.
That is according to a new report by The American Academy of Actuaries. Its Senior Health Fellow, Cori Uccello, said: “Proposed health insurance premium rates reflect many factors, which can include the effects of legislative and regulatory changes.”
“This is especially true for 2023 rates, due to the possible expiration later this year of enhanced Affordable Care Act (ACA) premium subsidies and of a key support of Medicaid coverage during the pandemic.”
ARPA, American Rescue Plan Act of 2021, which expires on the 1st of January 2023, increased advanced ACA premium tax credits in 2020 and 2021 for all eligible income brackets, including extending tax credits to those who earn over 400% of the federal poverty level.
The company explains that these subsidies make plans more affordable, but are set to end with the expiration of APRA in January, in turn reversing enrolment gains and possibly worsening plan risk pools.
“Provisions in the Families First Coronavirus Response Act (FFCRA) increased federal fiscal aid to states for covering Medicaid enrollees during the pandemic-related Public Health Emergency (PHE), contingent on the states suspending their usual processes for redetermining eligibility for Medicaid coverage,” says the The American Academy of Actuaries.
The reality is that these provisions are set to expire at the end of the quarter where the federal government does not renew the PHE, which the entity warns could happen this year.
“In that event, states could restart the usual redetermination process, meaning some individuals who received Medicaid coverage during the pandemic could no longer be eligible for Medicaid and shift to the individual market, the employer group markets, or become uninsured—a shift that could affect risk pools in the individual and small groups markets,” adds the organisation.
Other factors expected to drive premium rate changes for 2023 include changes due to the number of telehealth visits, changes in mental health care, and the impact of inflation on the cost of provider contracts.
