Newsletter

ACA PREMIUMS FOR 2025 PROJECTED TO RISE MORE THAN IN PAST SEVERAL YEARS

This article by Adriel Bettelheim published in the August 6 edition of Axios projects that rate increases for ACA plans will be higher than in the past several years. Due to increasing medical inflation, the effects of hospital consolidation and workforce shortages, and the demand for drugs used for diabetes treatment and weight loss, the median ACA increase for 2025 is now projected to be 9% (versus 6% for 2024).

Here is the entire article:

Growing demand for GLP-1 drugs like Ozempic and Wegovy and hospital consolidation could help drive up the cost of Affordable Care Act coverage next year by 9% or more, according to a recent analysis by the Peterson Center on Healthcare and Kaiser Family Foundation.

Why it matters: While most enrollees in the market get subsidies and won't have to foot the added bill, premium increases generally result in higher federal spending on subsidies, the analysis notes. (Editor’s Note: this is generally true for people qualifying for subsidies who earn up to 150% of the Federal Poverty, but those earning more and still qualifying for subsidies will see an increase in their net premiums after subsidies are applied.)

What they found: Rate filings by 61 insurers across 10 states and D.C. show ongoing hospital consolidation and workforce shortages are having an inflationary effect on premiums.

• So, too, is the explosion in demand for drugs used for diabetes treatment and weight loss.
• Though few ACA plans cover drugs that are approved only for weight loss, several insurers singled out GLP-1s as a driving force behind premium increases for 2025.
• The analysis notes insurers are using strategies like prior authorization, step therapy and limiting quantities to control demand of Ozempic and other GLP-1s that are approved for diabetes but have potential for off-label use to lose weight.
• Specialty drugs and biologics, including pricey gene therapies, are also becoming more prevalent and driving premiums upward.

Most insurers say ongoing state Medicaid redeterminations, COVID-19 treatment and tests and the federal surprise billing ban are not having a major effect on 2025 premiums.

Context: Last year, insurers proposed rate increases for 2024 coverage that were between 2% and 10%, with a median increase of 6%, according to the Peterson-Kaiser Family Foundation (KFF).

• This year's detailed review of factors driving premium changes for 2025 found insurers have proposed somewhat higher rate increases, with a median of 9%. (Editor’s Note: an earlier study by Peterson-KFF projected the median increase to be 7%.)
• The basis for the federal subsidies is the percent change in the benchmark ACA silver plan.

The bottom line: Medical inflation has picked up and now exceeds the growth of non-medical prices — a big change from 2021 to 2023. ACA plans are adjusting to keep pace and reflect their higher costs and overhead.

RETIREFLO: OBTAINING A QUOTE FOR AN ACA PLAN

If you would like a quote for an ACA plan you can request a quote using our ACA- and HIPAA-compliant survey form at https://app.retireflo.com/paul-cholak-aca.   

Please enter your personal information, medications, and providers and complete the Consent Form at the end of the quote and you’ll be able to obtain a quote from us at any time.

The survey form automatically updates for open enrollment (which runs from November 1 through January 15) and for special enrollment, and it also updates to ask you for income information for the correct year, so we can calculate a subsidy. Before we’re able to provide you a quote, we must comply with the new consent requirements required to help clients. The consent form is included in the survey.

The quoting system for ACA plans at www.getinsuranceanywhere.com is also compliant and contains the required consent form as well. If you go to the website and click on Get An ACA Quote we will receive that quote. The form on this site is presently available to request quotes for 2024 plans before the end of the year. During open enrollment the form will be updated so it doesn’t request information about qualifying life events (no qualifying life event is required during open enrollment) and the form will automatically change to request 2024 projected income or 2025 projected income, as required.

SHORT-TERM HEALTH PLANS CURTAILED AS OF SEPTEMBER 1

Effective September 1, short-term health insurance can only be offered for a maximum of 3 months with a one-month extension. Short-term plans are reverting to the type of durations that applied during the Obama administration. States are permitted to impose shorter durations, but Florida is permitting the maximum duration allowed under the new regulations.

Those with longer duration plans purchased before September 1 have been grandfathered and are permitted to retain those plans.

Short-term health plans have previously been offered as an alternative to Affordable Care Act plans for people without significant pre-existing conditions who are looking for lower premiums than they can obtain through the Affordable Care Act or who don’t have a qualifying event permitting them to enroll in an Affordable Care Act plan outside of open enrollment.

The two major alternatives to short-term health plans that will now be offered are health (hospital-surgical) defined benefit indemnity plans and one-person group plans that are available to individuals and families.

Defined Benefit Indemnity plans offer a choice between different levels of hospital, medical and outpatient coverage and individuals and families can choose a plan according to their health care needs. Eligibility for these plans is based on medical underwriting and not all those who apply will be eligible for coverage. The plans have a 12-month pre-existing condition limitation, and pre-existing conditions are not covered until the policy has been in effect for twelve consecutive months.

Some Group Insurance Plans are available to self-employed individuals or members of certain Associations. These plans permit enrollment on a year-round basis and require successfully answering health questions to qualify, but there are no pre-existing condition limitations in these plans. The plans utilize either large Cigna or Blue Cross/Blue Shield national PPO networks. These plans provide for continuous enrollment (i.e., annual re-enrollment is not required), and members can remain enrolled until age 65 (the Cigna Association plans can be retained or purchased after age 65). None of these plans are available in Washington state, and the America's Choice national Blue Cross/Blue Shield plans are otherwise not available in CA, NH, OR, VT, or VA.

Please call us at 786-970-0740 if you are looking for alternatives to enrolling in an Affordable Care Act plan.

About Paul Cholak

Paul has over forty years of benefits experience and has been Director of Employee Benefits for large companies, as well as a benefits consultant with major consulting firms. He understands the health and life insurance needs of individuals and families of all ages. He also has considerable experience in selling health and life insurance to employer groups.

He guides you through the steps of getting health and/or life insurance and is available to help you both BEFORE and AFTER you've made your purchase decision.