Negative headlines in the past few weeks seem to suggest deep trouble for the Affordable Care Act’s (ACA) marketplaces. Several insurance plans have requested double-digit premium increases for 2017—and Aetna is the third major insurer to announce it is pulling out of several state marketplaces next year. But how concerned should we be about these developments and are there policy options to consider?
This year, premium requests by carriers have been higher on average than last year. Part of the reason for the increase is the phase-out of the law’s reinsurance program, which reimbursed carriers for high claims costs. The program has lowered premiums by as much as 14 percent, and without it carriers are raising their premiums to compensate. But even if final premiums in many plans are higher, most people who will enroll in marketplace plans this year will not pay much more than they did in 2015. This is because more than 80 percent of marketplace enrollees receive tax credits to help pay their premiums, which means most of the increase will be absorbed by the credits. Marketplace customers are also highly price-sensitive and will likely shop for the best deal. Last year, people who received tax credits through the federal marketplace experienced an average premium increase of only 4 percent.
HENRY KOTULA 