The academy’s individual and small group markets committee publishes a public policy issue brief every year that outlines the factors that will drive gross premium changes in the following plan year.
Eight key takeaways for 2023:
- There is lingering uncertainty around how new COVID-19 variants will interact with vaccines and potentially evade immunity, thereby causing another jump in major health conditions.
- The expiration of the American Rescue Plan Act ACA premium subsidies is likely to lead to a decline in enrollment and a worse risk pool, leading to higher premiums.
- Medicaid redeterminations may cause more people to find coverage on the individual market, potentially improving the risk pool and lowering premiums, though at a lower amount than the increase caused by the ACA subsidies expiration.
- Fixing the ACA “family glitch” and the narrowing of actuarial value de minimis ranges will influence premium changes.
- Inflation could have an effect on provider costs, but that may not happen until later plan years. Workforce shortages could also place upward pressure on provider payment rates.
- Payers are likely to consider changes to the composition of the small group market because small employers are shifting to self-funded, level-funded or other risk-rated coverage, or even leaving the market.
- Payers are also likely to consider the major changes in utilization patterns for telehealth visits and mental healthcare since the start of the pandemic.
- Enrollment in individual markets increased 21 percent from January 2021 to January 2022.
