CHA News Article

Analysis Shows Policies Could Lead to Dramatic 2019 Premium Increases

According to an analysis Covered California issued last week, health care insurance premiums could increase dramatically in 2019, with increases of 16 to 30 percent if no steps are taken to mitigate recent federal decisions, such as removing the individual mandate penalty, and reducing funding for marketing outreach. While California and other state-based marketplaces are not affected by funding reductions, the 39 states served by the federally facilitated marketplace could face premiums that are 4 to 9 percent higher in 2019 because of the decision not to promote enrollment. Covered California notes that the potential expansion of short-term, limited-duration plans and the potential impact of association health plans selling across state lines could divert healthy consumers from the common risk pool of the individual markets, worsening the risk mix and raising premiums for those who remain covered.

While the Affordable Care Act’s subsidies would largely insulate subsidized consumers from these costs, millions of unsubsidized consumers would pay the full price of these increases; many would likely be priced out of coverage. Continued uncertainty over policies and premiums may cause further carrier withdrawals, potentially leaving more consumers with only one available health plan or the prospect of “bare counties.” The analysis reviews three federal policy options that could stabilize markets and mitigate the impact of premium increases in many states, including funding state-based reinsurance, increasing marketing to promote enrollment in states with federally facilitated marketplaces, and reinstituting the health insurance tax holiday.