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American Academy of Actuaries Publishes Brief on Drivers of Changes in 2020 Health Insurance Premiums
On June 27, 2019, the American Academy of Actuaries (AAA) released its issue brief, Drivers of 2020 Health Insurance Premium Changes. The brief was developed by the AAA’s Individual and Small Group Markets Committee and presents the Committee’s perspective regarding the key factors affecting the 2020 health insurance premiums, including:
- The underlying growth in health care costs, or medical trend, which is expected to be consistent with 2019, ranging from 5% to 8%;
- Recent and ongoing policy changes related to the elimination of the individual mandate penalty as well as the expanded availability of short-term limited duration plans, association health plans, and health reimbursement arrangements;
- State actions to implement reinsurance programs, impose individual mandate penalties or enact rules that would affect alternative coverage options;
- Adjustments to assumptions to include cost-sharing reduction subsidies into premiums;
- Changes in the risk pool composition and insurer assumptions; and
- Reinstatement of the health insurance provider fee.
The brief is available here.