The report finds that insurers were on track to break even or make modest profits on ACA-compliant individual market policies in 2017, on average, before the Trump Administration’s decision to end cost-sharing reduction payments. The sharp improvement for 2017 were the result of the significant premium increases insurers implemented for 2017, together with continued subdued claims growth in the ACA-compliant individual market. That progress should have set the stage for comparatively moderate premium increases in 2018, likely in the mid-to-high-single digits. The higher premium increases occurring in reality likely reflect a range of threatened and actual changes in federal policy.
The Affordable Care Act (ACA) implemented wide-ranging reforms to the individual health insurance market starting in 2014, most importantly by barring insurers from denying coverage or varying premiums based on health status, requiring all plans to cover certain services and provide a basic level of financial protection, providing subsidies to help low- and moderate-income people afford coverage, and requiring all individuals to have coverage or pay a penalty. In “Taking Stock of Insurer Financial Performance in the Individual Health Insurance Market Through 2017,” (PDF) Matthew Fiedler takes a detailed look at insurers’ financial performance in this new institutional environment, as well the economic forces that have shaped that performance.