Beginning this week, hundreds of thousands of North Carolinians will again shop for health coverage through the Affordable Care Act exchange.
Entering 2017, however, shoppers in this state will see fewer options than in previous years.
Interest in the program has been high in North Carolina as more than 613,000 people enrolled in the program this year. However, these enrollees, on average, have been sicker than anticipated, driving costs higher than first predicted.
Blue Cross and Blue Shield of North Carolina, the state’s largest health insurer, reported a $280 million loss on plans purchased by ACA customers last year, which impacted the company’s bottom line for the second straight year.
These losses have driven other health insurers nearly completely out of offering ACA plans in North Carolina. Although Blue Cross will continue to offer plans in all 100 counties, it will again increase premiums on ACA plans this year. On top of a more than 30 percent premium increase last year, Blue Cross will increase premiums by an average of 24 percent in 2017.
While double digit increases can cause sticker shock, Jonathan Oberlander, a UNC-Chapel Hill professor of Health Policy and Management, said there is more to the story. In some ways, the premiums that insurers initially set should have been higher from the outset. Actuaries with the health insurance companies struggled to accurately predict what costs they would incur from this new group of enrollees.
“The premiums through 2016 were actually significantly lower than we expected them to be, so with these increases that we’ve had across the country this year, it’s going to put the premiums about where we expected them to be back in 2010,” said Oberlander.
Furthermore, it’s important to remember that these marketplace enrollees account for the minority of all those who buy health insurance. Nearly two out of three working age adults in North Carolina buy health insurance through an employer, and these ACA rate increases to not affect them.
Federal subsidies also offset the costs of health insurance to low- and middle-income households, and consumers in North Carolina have benefited from these subsidies more than in nearly every other state. In addition, studies have shown that premiums were held down by about 7 percent in states that expanded Medicaid.
To Oberlander, 2017 will be telling. “The big question is what happens from here? Next year, do we have a modest premium increase, or do we have another sizeable increase? And none of us really can see in that crystal ball right now,” he said.