COVID Factor Could Both Raise, Reduce ACA Rates Next Year

May 28
May 28, 2021

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%.
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Leslie Small

Leslie has been working in journalism since 2009 and reporting on the health care industry since 2014. She has covered the many ups and downs of the Affordable Care Act exchanges, the failed health insurer mega-mergers, and hundreds of other storylines spanning subjects such as Medicaid managed care, Medicare Advantage, employer-sponsored insurance, and prescription drug coverage. As the managing editor of Health Plan Weekly and Radar on Drug Benefits, she writes and edits for both publications while overseeing a small team of reporters who also focus on the managed care sector. Before joining AIS Health, she was a senior editor for the e-newsletter Fierce Health Payer, and she started her career as a copy editor at multiple local newspapers. She graduated with a dual degree in journalism and political science from Penn State University.