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.
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