PHILADELPHIA CREAM – The average cost of health insurance will increase from 6% to 7.5% in 2023, compared to 4.4% expected in 2018. The average increase is above the 8-9% expected for headline inflation. Since health plans typically have multi-year contracts with providers, the impact of price inflation will be felt gradually over the next few years. Higher reimbursement levels will accompany price increases for providers. However, employers now have a small window to make changes to prevent premium increases from rising dramatically in 2024.
Rate hike in Connecticut
In Connecticut, health care advocates and residents have repeatedly called on state officials to block a substantial rate hike. They also highlighted their concerns about how a rate hike will affect health care access and affordability. One such advocate, Lynne Ide, is the communications program manager for the Universal Health Care Foundation of Connecticut. She supports legislation that gives the insurance department more teeth to stop rate hikes.
Connecticut residents can expect to see their electricity bills increase by at least 3% over the next few years. This increase will be less than the current inflation rate, affecting a few categories of a monthly bill. One such category is the delivery portion, which includes taxes and other charges imposed by the state and federal government. Rate 1 is the most common residential rate in Connecticut. If approved by the Public Utilities Regulatory Authority (PURA), the rates would take effect September 1, 2023. The increase would equate to a monthly bill of $3.96 for an average residential customer.
Impact of the No Surprises Act on premiums
Currently, the impact of the no surprises law on health insurance premiums is unclear. Only a few insurers have considered the impact of the law. Some insurers mentioned the implementation of Family Glitch and the No Surprises Act, but none cited a substantial impact on premium growth.
According to a new study, the impact of the no surprises law on health insurance premiums should be small. During the second quarter of this year, 19 insurers reported an increase of five to ten percent, while 15 insurers forecast increases ranging from ten to fifteen percent. Only one reported a reduction among the eight issuers who reported increases of twenty to twenty percent. Overall, insurers expect premiums to rise between four and eight percent in 2023. This increase is based on rising prices for healthcare supplies and labor costs associated with the economy. .
The No Surprises Act is an important piece of legislation passed to protect consumers from surprise medical bills. Its passage was the result of bipartisan support. It aims to protect consumers against unforeseen medical expenses, one of the main sources of consumer concern. Federal agencies quickly implemented it.
Impact of Family Glitch Fix on premiums
The Family Glitch patch is a proposal to increase Americans’ access to affordable health coverage. The proposal would allow spouses and dependents of those earning up to 400% of the federal poverty level to find affordable health insurance coverage through exchanges. The proposed changes will likely reduce health insurance premiums by at least $970 a year for families earning the median income.
The proposed rule is available for public comment until June 6, 2022, and an IRS hearing is scheduled for June 27. The fix would provide financial assistance to affected families beginning in plan year 2023. The proposal will be a long-term solution and will require additional work by federal agencies. The Kaiser Family Foundation and the Urban Institute have conducted studies on the Family Glitch and estimate that up to five million families are affected by the glitch.
Impact of the Covid-19 pandemic on premiums
The COVID-19 pandemic has the potential to increase premiums in the near future. However, the impact will be limited, as most insurers anticipate that the disease will not affect the individual market much. Premiums for the year 2023 will also likely be affected by the end of US bailout (ARP) subsidies. This will likely increase returnable premiums, especially for enrollees in good health. However, insurance companies are hoping Congress will extend those subsidies before the rate-setting process is complete.
Most insurers mentioned the COVID-19 pandemic in their outlook for the coming years, but only half quantified how it will affect premiums. Some say it will have a neutral net effect on premiums, while others predict a moderate downward impact.
New York State Health Essential Plan Impact on Premiums
The New York State of Health Essential Plan would be a state-sponsored health insurance program covering low-income residents. The plan would cost $345 million a year, including savings from Medicaid emergency compensation, covering 46,000 new enrollees. The state would pay those premiums, which might have to apply for a federal waiver to cover that segment of the population.
The Essential plan is available to New Yorkers who earn 138% or less of the federal poverty level. This plan would reduce monthly premiums and reduce out-of-pocket expenses for medical services. Comprehensive Essential Plan benefits include free preventative care and reduced copayments. Compared to a qualified health plan, it costs about $1100 less. This change may moderate the impact on QHP premiums, but overall consumers will benefit.