COVID Factor Could Both Raise, Reduce ACA Rates Next Year
As health insurers gear up for the 2022 rate-filing season for Affordable Care Act exchange plans, the good news is that much of the regulatory uncertainty seen in years past has dissipated — save for a looming Supreme Court decision on the ACA’s legality. However, the pandemic’s effect on medical spending is a nebulous factor that insurers can’t escape this year, and it’s likely to have a wide-ranging impact, says David Dillon, a fellow of the Society of Actuaries.
Dillon, who works directly with insurers and regulators to develop and review health insurance rates, predicts the COVID-19 impact on premiums will be anywhere from a 5% decrease to a 5% increase. Medical cost inflation, he estimates, will increase rates by 4% to 6%, while the American Rescue Plan’s expansion of premium subsidies will decrease rates by 1% to 4%.