According to a report from the Kaiser Family Foundation, insurers who participate in selling health insurance plans in the Affordable Care Act (ACA) markets have collected more premiums than needed. The report estimates that insurers have collected an excess of $800 million in premiums and are expected to give these premiums back to consumers as rebates.
The report speculated that the over collection of premiums was due to the uncertainty of the future of the ACA, with the Trump Administration aiming to repeal and replace the mandate, possible affecting millions of American consumers. Heath insurers reacted to the possible repeal and replace by hiking up insurance premiums. The payment of $1.4 billion will be the biggest consumer payment since 2010.
Despite the uncertainty over the future of the ACA, 2018 served as the best performance financially since 2011. The gross margin per member had increased to $167, compared to $78 in 2017.
According to the Kaiser Family Foundation’s program director, Cynthia Cox, insurers “would have only needed small increases or even to hold premiums mostly flat going into 2018 but instead rates went up by more than 20%.”
Also, another major influence on the driving uncertainty for the future of ACA was the Trump Administration’s discontinuation of cot-sharing subsidies, which was enacted in 2017.
Read the original article from Modern Healthcare here.