Insurance Market Reform

The Affordable Care Act (ACA) requires health insurers to justify rate increases that are 10 percent or more for non-grandfathered plans in the individual and small-group markets. In analyzing these filings for renewals taking effect from mid-2013 through mid-2014, this brief finds that the average rate increase submitted for review was 13 percent. Insurers attributed the great bulk of these larger rate increases to routine factors, such as trends in medical costs. Most insurers did not attribute any portion of these medical cost trends to factors related to the ACA. The ACA-related factors mentioned most often were nonmedical: the new federal taxes on insurers, and the fee for the transitional reinsurance program.

The Affordable Care Act (ACA) protects people from being charged more for insurance based on factors like medical history or gender and establishes new limits on how insurers can adjust premiums for age, tobacco use, and geography. This brief examines how states have implemented these federal reforms in their individual health insurance markets. The authors identify state rating standards for the first year of full implementation of reform and explore critical considerations weighed by policymakers as they determined how to adopt the law’s requirements. Most states took the opportunity to customize at least some aspect of their rating standards.

This proposed rule provides payment parameters and provisions related to the risk adjustment, reinsurance, and risk corridors programs; cost sharing parameters and cost-sharing reductions; and user fees for Federally-facilitated Exchanges. It also provides additional standards for the annual open enrollment period for the individual market for benefit years beginning on or after January 1, 2016, essential health benefits, qualified health plans, network adequacy, quality improvement strategies, the Small Business Health Options Program, guaranteed availability, guaranteed renewability, minimum essential coverage, the rate review program, the medical loss ratio program, and other related topics. Comments on the proposed rule are due by December 22, 2014.

One objective of the health insurance Marketplaces created through the Affordable Care Act (ACA) is to encourage competition among insurers with the goal of lower premiums for consumers and lower subsidy costs for the federal government. One strategy insurers have used to offer lower premiums and capture market share has been the creation of “narrow networks” of providers and facilities. The ACA includes network adequacy requirements, but there remains considerable variation in the breadth of acceptable hospital networks and the options available in each. This brief investigates which hospitals are included in Marketplace plans in major cities in six states, and examines how hospital networks vary across plans within a single insurer and across all insurers.
 

This guide is focused solely on the private insurance reforms of the ACA, including the health insurance marketplaces, rating, benefit and cost structures, and premium tax credits. It is intended to supplement the Navigator training available from the U.S. Department of Health and Human Services. It is not intended to be a comprehensive, stand-alone resource for all the reforms of the ACA. This resource is organized into sections that address how individuals may present themselves to Navigators based on their insurance status and coverage options. It includes questions and answers developed in collaboration with the staff at the Center on Budget and Policy Priorities, the Georgetown University Center for Children and Families, and the Kaiser Family Foundation.