Health insurance premiums expected to rise 5.1% in 2024
Health insurers are proposing an average 5.1% increase in premiums for Affordable Care Act marketplace plans next year. This hike, driven by inflation and rising medical costs, would affect about 21 million enrollees. A potential government shutdown is unlikely to alter these rates significantly.
Insurers across the United States are filing requests for premium increases ahead of the 2024 open enrollment period, which begins in November. According to an analysis by the Kaiser Family Foundation (KFF), the average proposed hike for Affordable Care Act (ACA) marketplace plans stands at 5.1%. This figure is based on rate filings from 13 states, representing 57% of ACA enrollees nationwide.
The increases stem from ongoing pressures including high inflation, elevated medical costs, and utilization trends post-pandemic. KFF notes that premiums for ACA plans have already climbed 22% since 2021, reflecting broader economic challenges. State-specific proposals vary widely: Maryland insurers are seeking a 15% average increase, while New York filings average 13%. In contrast, some states like Washington have proposed more modest rises around 4%.
A government shutdown, which could occur if Congress fails to pass funding legislation by mid-November, poses limited direct risk to these premium calculations. Rate approvals are handled at the state level by insurance commissioners, independent of federal operations. "The premium setting process is largely insulated from federal government functions," KFF health policy analyst Cynthia Cox said in the analysis. Even if a shutdown disrupts federal agencies like the Centers for Medicare & Medicaid Services, state regulators can continue reviewing and approving rates.
For consumers, these hikes could mean higher out-of-pocket costs unless offset by subsidies, which 80% of ACA enrollees currently receive. The Biden administration has expanded eligibility for these subsidies through 2025 via the Inflation Reduction Act, potentially softening the impact for many. However, without congressional action, subsidies could expire, leading to sharper increases for low- and middle-income households.
KFF's review covers filings submitted by early October, with final approvals expected before open enrollment. Insurers must justify their requests with data on claims costs and administrative expenses, ensuring transparency in the process.