2021 Rate Changes

Every year, I spend months painstakingly tracking every insurance carrier rate filing for the following year to determine just how much average insurance policy premiums on the individual market are projected to increase or decrease.

Carriers tendency to jump in and out of the market, repeatedly revise their requests, and the confusing blizzard of actual filing forms sometimes make it next to impossible to find the specific data I need. The actual data I need to compile my estimates are actually fairly simple, however. I really only need three pieces of information for each carrier:

  • How many effectuated enrollees they have enrolled in ACA-compliant individual market policies;
  • What their average projected premium rate increase (or decrease) is for those enrollees (assuming 100% of them renew their existing policies, of course); and
  • Ideally, a breakout of the reasons behind those rate changes, since there's usually more than one.
  • In 2015, I projected that the overall average rate increases for 2016 would be roughly 12-13% nationally. It turned out to be around 11.6%.
  • In 2016, I projected that the overall average rate increases for 2017 would be roughly 25% nationally. It turned out to be around 22%, but that only included on-exchange Silver plan enrollees across 44 states (I included all metal levels, both on and off exchange, across all 50 states).
  • In 2017, I projected that the overall average rate increases for 2018 would be around 29% nationally, and that 60% of that would be due specifically to deliberate Trump Administration actions designed to sabotage the ACA markets. It turned out to be around 28% nationally.
  • In 2018, I projected that the overall average rate increases for 2019 would be around 2.8% nationally, and that premiums would have dropped around 5.4% on average if not for the ACA's individual mandate being repealed & short-term & association plans being expanded. Hhealthcare think tank Avalere Health came to almost the exact same estimates on the actual rate changes, while Brookings Institute healthcare analyst Matthew Fiedler concluded that unsubsidized ACA individual market premiums would indeed have dropped by around 4.3% nationally on average in the absence of mandate repeal and expansion of #ShortAssPlans.

In other words, I've had a pretty good track record of accurately projecting average premium increases for the upcoming year for five years in a row. With that in mind, below you'll find a table tracking the state-by-state preliminary and final rate changes for the 2021 ACA-compliant individual (and sometimes small group) markets. Scroll down for individual state entry links.

For 2021, the biggest new factor is, of course, the impact of the COVID-19 pandemic on both 2020 and 2021 medical claims expenses. I've added a new column which attempts to separate that out, though not every carrier does so, while some simply refer to the impact of COVID-19 in a fairly vague way.

(click image for higher-resolution version)

Tennessee has also posted their preliminary 2021 rate filings for both the individual and small group markets. Aside from being one of the few states where a significant number of carriers are including any COVID-19 pandemic factor at all (in both markets), Tennessee has several new entrants and one significant withdrawl (I think).

On the individual market, UnitedHealthcare is newly entering, while Cigna is expanding their coverage areas as noted here. Cigna is also newly entering Tennessee's small group market, as is Bright Health Insurance.

Overall, Tennessee carriers are asking for a 10.3% increase on the indy market (the second highest so far after New York's 11.7% average), mostly driven by Blue Cross Blue Shield, which holds a whopping 83% of the market. On the small group market, the average increase is 5.5%.

COVID-19 accounts for 1.7 points of the increase on average in the indy market and 2.6 points in the small group market. This, again, is the highest statewide average COVID impact I've seen after New York state so far.

Last year, thanks to the Section 1332 Reinsurance waiver allowed for by the ACA, Montana health insurance carriers reduced their premiums for 2020 by 13.1% on average on the individual market, while raising them by 7% on the small group market (which the reinsurance program doesn't impact).

For 2021, avg. premiums are going up again, but only by a nominal amount...the requested increases average 3.2% for the individual market and just 2.4% for small group carriers:

The good news out of Minnesota is that the Commerce Dept. has published the preliminary 2021 average rate changes for both the individual and small group markets in a simple table.

The bad news is that they haven't published any of the actual actuarial memos or templates which include the two other critical pieces of data I need to run my analysis: The current effectuated enrollee totals for each carrier, and what (if any) impact the COVID-19 pandemic had on the proposed rate changes.

I was able to estimate the former by looking at MNsure's June executive board meeting slide deck, which breaks out the on-exchange enrollment by carrier by percentage. Unfortunately, this doesn't include off-exhange enrollment. Minnesota's total individual market was around 155,000 people a year ago, so the odds are that nearly 1/3 of the total market is missing below. I also have no idea about any COVID-19 factor in the rate filings yet.

Hawaii only has two carriers participating in the Individual health insurance market. For 2020, they're reducing unsubsidized premiums by 1.7%

COVID-19 isn't listed as a factor at all by either of the carriers, nor by any of the small group carriers in Hawaii either...which makes total sense since Hawaii has the lowest rate of COVID-19 infection in the country.

The small group carriers are requesting a weighted average reduction of 2% as well, although one of the four doesn't have their actual rate change or current enrollment available yet, so this could change.

Every year, I spend months painstakingly tracking every insurance carrier rate filing for the following year to determine just how much average insurance policy premiums on the individual market are projected to increase or decrease.

Carriers jump in and out of the market, their tendency repeatedly revise their requests, and the confusing blizzard of actual filing forms which sometimes make it next to impossible to find the specific data I need. The actual data I need to compile my estimates are actually fairly simple, however. I really only need three pieces of information for each carrier:

New Mexico is the latest state to post their preliminary 2021 rate change filings for both the individual and small group markets. There's several key things to note here:

Michigan is the 8th state (by my count) where the insurance carriers have posted their preliminary 2021 premium rate change filings. Every year brings some new twist (in 2018 it was CSR reimbursement payments being cut off; in 2019 it was the zeroing out of the ACA's federal individual mandate penalty; in 2020 it was sort of the repeal of the ACA's health insurer tax (HIT), although that didn't actually happen until after 2020 premiums had already been locked in; and for 2021...it's the COVID-19 pandemic, of course.

I've therefore added a new column for my weighted average rate change spreadsheets. So far only a handful of carriers have tacked on any substantial rate changes due to expected cost increases from testing & treatment of COVID-19 next year...the general rule of thumb seems to be that the added costs are pretty much gonna be cancelled out by reduced claims from non-COVID healthcare services (delayed/cancelled treatments/procedures, etc).

Over at healthinsurance.org, Louise Norris has already done the work for me in tracking down the preliminary 2021 individual and small group market rate changes for the state of Maine:

Average premiums expected to decrease Maine’s exchange in 2021

Maine’s three individual market insurers filed proposed rates for 2021 in June 2020 (average proposed rate changes are summarized here by the Maine Bureau of Insurance). For the second year in a row, average rates are expected to decrease for 2021:

via the Maryland Insurance Administration:

Health Carriers Propose Affordable Care Act (ACA) Premium Rates for 2021

BALTIMORE – Health carriers are seeking a range of changes to the premium rates they will charge consumers for plans sold in Maryland’s Individual Non-Medigap (INM) and Small Group (SG) markets in 2021.

The rates submitted for the INM market include the estimated impacts from the state-based reinsurance program (SBRP) enacted in 2019 via a 1332 State Innovation Waiver, approved by the federal Centers for Medicare & Medicaid Services.

New York is the fifth state (well, fourth really) to announce their preliminary 2021 health insurance policy premium rate changes for the individual and small group markets (thanks to Michael Capaldo for the heads up):

NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES

2021 INDIVIDUAL AND SMALL GROUP REQUESTED RATE ACTIONS

6/5/2020

Health insurers in New York have submitted their requested rates for 2021, as set forth in the charts below. These are the rates proposed by health insurers, and have not been approved by DFS.

via the Washington Insurance Commissioner's office:

OLYMPIA, Wash. – Fifteen health insurers filed an average proposed rate decrease of 1.79% for the 2021 individual health insurance market. This includes two new insurers — UnitedHealthcare of Oregon and Community Health Network of Washington — that are joining Washington’s market. 

With 15 insurers in next year’s individual market, all 39 counties will have at least two insurers selling plans inside the exchange, Washington Healthplanfinder. Ten insurers will sell plans outside of the exchange. 

The proposed average rate decrease follows an average premium reduction of 3.25% for 2019 plans. 

The District of Columbia has joined Vermont and Oregon in releasing their preliminary 2021 Individual and Small Group market premium rate filings:

This page contains proposed health plan rate information for the District of Columbia’s health insurance marketplace, DC Health Link, for plan year 2021.

The District of Columbia Department of Insurance, Securities and Banking (DISB) received 188 proposed health insurance plan rates for review from Aetna, CareFirst BlueCross BlueShield, Kaiser Permanente and United Healthcare in advance of open enrollment for plan year 2021 on DC Health Link, the District of Columbia’s health insurance marketplace.

The four insurance companies filed proposed rates for individuals, families and small businesses for the 2021 plan year. Overall, 188 plans were filed, compared to 181 last year. The number of small group plans increased from 156 to 163, and the number of individual plans remained at 25.

In the middle of a deadly global pandemic which has already killed more than 100,000 Americans and completely disrupted the entire U.S. healthcare system, private insurance carriers still have to go about preparing their annual premium rate change filings for 2021. This is a long, complicated process which begins a good nine months before the new plans and prices are actually enrolled in.

The task of setting 2020 premiums was the first time since the ACA went into effect which was relatively calm for insurance carrier actuaries:

Annnnnd we're off! In the middle of a deadly global pandemic which has already killed more than 85,000 Americans and completely disrupted the entire U.S. healthcare system, private insurance carriers still have to go about preparing their annual premium rate change filings for 2021. This is a long, complicated process which begins a good nine months before the new plans and prices are actually enrolled in.

The task of setting 2020 premiums was the first time since the ACA went into effect which was relatively calm for insurance carrier actuaries. Unlike setting rates for 2014 or 2015, they weren't dealing with a complete overhaul of the entire insurance industry. Unlike 2016-2017, they weren't dealing with the prospect of ACA premiums being crippled for 3/4 of the country (via King v. Burwell) or the fallout of the Risk Corridor Massacre. Unlike 2018, they weren't dealing with how to deal with CSR rembursements being cut off or the entire ACA being repealed by Congress. Unlike 2019, they didn't have the unknown impact of the individual mandate being repealed to consider.

Every year, I spend months painstakingly tracking every insurance carrier rate filing for the following year to determine just how much average insurance policy premiums on the individual market are projected to increase or decrease.

Carriers jump in and out of the market, their tendency repeatedly revise their requests, and the confusing blizzard of actual filing forms which sometimes make it next to impossible to find the specific data I need. The actual data I need to compile my estimates are actually fairly simple, however. I really only need three pieces of information for each carrier:

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