The future of the individual health insurance market is unclear, as market and regulatory uncertainty have led to premium increases and the exit of some payers. With open enrollment just around the corner and health reform on hold (for now), policymakers and industry leaders are considering a variety of strategies to stabilize the individual market.
New analysis from Oliver Wyman breaks down the challenges facing insurers in today’s individual market and explores the potential impact of stabilization proposals. You can read the full report here. Below, Kurt Giesa, FSA, MAAA, and Peter Kaczmarek, FSA, MAAA, of Oliver Wyman Actuarial Consulting provide a summary of their analysis.
What’s driving today’s premium increases
Insurers incurred steep financial losses in the individual market after the ACA exchanges launched in 2014. For insurers and their insureds, one of the more costly provisions of the ACA is the requirement that insurers provide coverage to anyone willing to pay their premium (guaranteed issue) at a price that does not reflect the individual’s risk (modified community rating).