Insurance experts: ObamaCare mandate repeal driving premium increases

Insurance experts: ObamaCare mandate repeal driving premium increases
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Increases in health-care costs and policy changes are driving ObamaCare premium increases for the 2019 plan year, according to a new report released Wednesday. 

The American Academy of Actuaries says that the elimination of the individual mandate penalty and the expansion of cheaper health plans with fewer benefits will contribute to premium increases next year.

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“The individual market, which had shown signs of stabilizing, now faces a potential deterioration of the risk pool due to policy changes that reduce incentives for healthy individuals to enroll in [ObamaCare] marketplace plans. This deterioration and other factors could drive premiums higher for 2019,” said senior health fellow Cori Uccello.

Several insurers seeking rate increases for next year have cited the repeal of the mandate penalty as a primary reason for the request. 

“Eliminating the penalty is expected to increase premiums as unsubsidized lower-cost healthy individuals will be more likely to forgo coverage,” the brief says. 

The Trump administration is expected to roll out changes this summer that would expand access to short-term, limited-duration plans and association health plans. 

These plans, which are typically cheaper but cover fewer benefits than ObamaCare plans, are meant to serve as an alternative for those who can't afford ObamaCare premiums, the administration argues. 

But health-care experts say the wide availability of these plans could draw healthy people away from ObamaCare, leading to premium increases for those remaining.

The individual mandate required most people to have health insurance or pay a fine.

The actuaries say that the effects of the expanded availability of these plans would be “exacerbated” with the elimination of the individual mandate penalty. 

An underlying growth in health-care costs could also have an impact on premium increases, the actuaries say. 

On the flip side, Congress's suspension of a fee on health insurance is expected to lead to a reduction in premiums by about 1 to 3 percent, the actuaries say. 

Several states across the country have already proposed premium increases for 2019. 

Insurers in New York requested an average hike of 24 percent, while Washington state's proposed increases average 19 percent. 

Because ObamaCare's subsidies are designed to increase with premiums, those who use subsidies to buy insurance will see little impact from the increases. 

But those who don't get subsidies would not be shielded from increases.