Industry News

On January 28, 2019, the U.S. Government Accountability Office (GAO) released its report, Health Insurance Exchanges: Claims Costs and Federal and State Policies Drove Issuer Participation, Premiums, and Plan Design. GAO examined health insurance exchange activities including: 1) claims costs of issuers participating in exchanges; and 2) factors driving selected issuers’ changes in exchange participation, premiums, and plan design. GAO studied data from nine issuers participating in five states, which represented a varied range in size, tax status, and exchange participation. The five states (California, Florida, Massachusetts, Minnesota, and Mississippi) were selected to provide diversity in geography and whether they had a federally facilitated or state-based exchange.

The report highlights include:

• From 2014 to 2016, claims costs were higher than expected in earlier years;
• From 2017 to 2017, claims costs typically increased, but selected insurers experienced volatility in costs mainly due to large variations in the number and health of enrollees from year-to-year; and
• Average monthly claims costs changed significantly among issuers in the same state.

In addition, selected issuers cited various factors that affect changes related to participation, premiums and plan design, including: claims costs; federal funding changes; and state requirements and funding. In the near future, selected issuers recognized that changes in federal and state policies will continue to affect decisions specifically related to premium changes.

The report is available here.