ACA Implementation: What’s Next

Karen IgnagniHealth Affairs Conference

Tuesday, July 17, 2012, National Press Club, Washington, D.C.

Interaction of 2014 Provisions

PremiumsPremium Subsidies

Premium Tax

Age Rating

Compression

Essential Benefit

Changes

Modest Incentives

to Purchase Coverage

Cost-sharing Subsidies

WA

OR

CA

NV UT

ID

MTND

WY

AZNM

CO

SD

NE

KS

OK

TX

AK

HI

LA

AR

MO

IA

MN

FL

MSAL

GA

WI

IL

MI

IN OH

KYWV

VA

NCTN

SC

ME

PA

NY

MD

DENJ

CTRI

VT

MA

NH

Rate bands 5:1 or greater

Rate bands less than 5:1

Age-Rating Compression: Higher Premiums for Younger Individuals in

42 States

The ACA limits the age band to 3:1, which will increase costs for younger individuals in the 42 states that currently allow health insurance rates to vary by age by 5:1 or more

Independent State Studies Show Impact of Essential Benefits

RequirementStudy Increase in Non-Subsidized Individual Market

Premiums due to Federal EHB Requirements

Ohio(Milliman - Prepared for the Ohio

Department of Insurance) 20%-30%

Maine(Gorman Actuarial/Gruber -

Prepared for the Maine Bureau of Insurance )

33%

Maryland (Oliver Wyman – Prepared for the

Maryland Health Care Commission) 8%-10%

Minnesota(Gorman Actuarial/Gruber – Prepared for the Minnesota Department of Commerce)

6%-7%

Impact of the Premium Tax in the Fully-Insured Market

Increase in premiums 1.9%-2.3% in 2014

2.8%-3.7% in 2023

10-year increase in the total cost of coverage in the individual market

For Individuals: $2,200

For Families: $5,100

10-year increase in the total cost of coverage in the small group market

For Individuals: $2,800

For Families: $6,800

Oliver Wyman. Estimated Premium Impacts of Annual Fees Assessed on Health Insurance Plans. October 31, 2011.