UPDATE 8/16/22: President Biden officially signed the Inflation Reduction Act into law this afternoon!

Annnd there you have it: In a strict party-line 220-207 vote, the Inflation Reduction Act (a stripped-down version of the Build Back Better Act, which was originally branded as the American Families Plan) finally passed the U.S. House of Representatives after passing the U.S. Senate 51-50 (with Vice-President Harris as the tie-breaking vote) on Sunday. I presume President Biden will be holding a big, formal signing ceremony sometime next week.

A big chunk of the bill is related to climate change, of course, and another large chunk of it is purely related to deficit reduction. As for the healthcare provisions, here's a summary of what's included:

Rate Changes

I'm about 1/3 of the way through my Annual Individual & Small Group Market Rate Filing project, having analyzed & crunched the numbers for 18 states + DC. This seems like a good time to step back and see where things stand.

So far, I've compiled the preliminary unsubsidized average premium rate filings for both the ACA-compliant individual and small group markes in Akransas, Colorado, Connecticut, Delaware, DC, Georgia, Hawaii, Indiana, Kentucky, Maine, Maryland, Michigan, Minnesota, New York, Oregon, Rhode Island, Tennessee, Vermont and Washington State. It's important to remember that these are preliminary filings only--many of the carriers will have their final 2023 rate changes reduced, although in most cases they tend to be approved as is, and in some cases they're even increased beyond what the carrier originally requested.

It's also important to note that these 18 states + DC only represent around 30% of the total U.S. population...aside from New York, the other big states (California, Florida, Texas, Pennsylvania, etc.) haven't posted their 2023 filings yet.

North Dakota

The headline above is actually a bit questionable; I'm not 100% sure whether the second rate filings are final/approved or not. They're lower than the "requested" rates listed on the federal Rate Review website, and the filing forms say these are "approved," but there hasn't been a formal press release issued either so it's hard to be sure.

In any event, the weighted average unsubsidized rate increase for 2023 looks like it's 4.4% on the individual market (down from the earlier 5.9% requested hikes), while the small group market carriers are requesting average increases of 4.1%.

New York

I wasn't expecting New York to be the first state to publicly release their final/approved rate filings, but so be it (in fact, they're just the first state I'm aware of to do so).

Thanks to Michael Capaldo for the heads up on this press release from the NY Dept. of Financial Services:



Virginia has an extremely robust, competitive individual & small group insurance market...and in 2023 it's getting even more competitive, with what appear to be two new carriers joining the individual market (Aetna Health Inc. and Anthem EPO), although Anthem is only offering off-exchange policies (why??) while Bright Health Insurance appears to be dropping out of the individual market (which is a common theme for Bright this year...)

Virginia used to be one of the first states to release their preliminary rate filings for the upcoming year, but for the past year or two it's been among the later ones. I don't know how much of this is due to COVID-related issues or if it's just an internal policy change for some other reason. Regardless, as a result, VA also happens to be the first state to release their annual rate filings since the Inflation Reduction Act (which includes a 3-year extension of the enhanced ACA subsidies) passed both the U.S. House and Senate.

Having said that, I'm pretty sure these filings still reflect the pre-IRA world, since most of the forms appear to have been submitted to the SERFF database back in May. Plus, President Biden didn't actually sign the bill into law until a few days ago, so any filing changes based on it couldn't actually be officially considered until after that happened.

Instead, the most significant thing to impact Virginia carriers 2023 filings is the state's Section 1332 Reinsurance Waiver. I wrote about this way back in 2018 when the state was originally considering applying for one, but it sounds iike it didn't actually go through until 2021 and doesn't actually go into effect until this January:

During 2021, the Virginia General Assembly passed HB 2332, the Commonwealth Health Reinsurance Program, which was signed into law on March 31, 2021 as Chapter 480, of the 2021 Virginia Acts of Assembly. This bill requires the State Corporation Commission to submit a waiver request for federal approval to establish a reinsurance program beginning January 1, 2023.

Section 1332 of the Affordable Care Act permits a state to apply for a State Innovation Waiver (also referred to as a section 1332 waiver) to pursue innovative strategies for providing residents with access to high quality, affordable health insurance while retaining the basic protections of the ACA. The program also provides pass-through funding to the state for federal savings from approved initiatives.

The proposed reinsurance program would be funded through state general funds and federal pass-through funding provided under the waiver. It would reimburse carriers in the individual health insurance market for a proportion of the claims of covered individuals with high annual costs. The program is designed to increase affordability in the individual market with a statutory goal of decreasing premiums by up to 20 percent.

...On May 18, 2022, federal reviewers issued a letter approving Virginia’s State Innovation Waiver application to establish the Commonwealth Health Reinsurance Program (CHRP) for an initial period of up to five years, beginning in 2023. Per enactment language, the remaining Virginia statutes establishing the CHRP will become effective on June 17, 2022, 30 days after the Commission provided notice of federal approval.

The CHRP is designed to operate as a traditional reinsurance program by reimbursing ACA individual market health insurers for a percentage of an enrollee’s claims costs exceeding a specified threshold (or “attachment point”) and up to a specified ceiling (or “reinsurance cap”). Specifically, in 2023, the approved program would reimburse claims between an attachment point of $40,000 and an estimated $155,000 cap with a coinsurance rate of 70%. This program is projected to reduce individual premiums in the ACA marketplace by 15.6% for plan year 2023.

Here's my reinsurance explainer. It sounds like Virginia's is pretty typical.

However, it doesn't look like it's going to have quite as dramatic an impact on unsubsidized rates in 2023 as they had hoped at the time; on average, unsubsidized premiums are expected to drop by around 13% rather than the 15.6% anticipated in the waiver application.

On the other hand, these are still only preliminary filings; they might be further reduced after regulatory review...and of course the fact that the IRA was passed and signed into law means that the enhanced subsidies will continue for at least three more years, which itself should have some impact on the final rate filings.

One other small factor: There's a bit of confusion on the actual average rate change for four of the carriers (CareFirst BlueChoice, GHMS, Kaiser and Optima Health), all of which show different average reductions in the actual filing forms than are shown on the federal rate review website.

Meanwhile, the small group market in Virginia doesn't appear to have any such drama going on; 2023 premiums will go up an average of around 6.4%, assuming the filings are approved as is.

Covered California Logo

via Covered California:

  • The Inflation Reduction Act extends the increased financial help initially provided by the American Rescue Plan through the end of 2025.
  • The increased subsidies expanded health care coverage, leading to record enrollment in California and across the nation, and lowered insurance costs for people who signed up through an Affordable Care Act marketplace.
  • The landmark legislation will continue to make coverage more affordable at a time when many individuals and families are facing increased challenges in the current economic environment.

La versión en español de este Comunicado puede ser descargada en este enlace


via the Michigan Dept. of Insurance & Financial Services:

(LANSING, MICH) Michigan Department of Insurance and Financial Services (DIFS) Director Anita Fox is applauding Congress and the Biden Administration for enacting the Inflation Reduction Act which, in part, will extend increased Health Insurance Marketplace premium subsidies for another three years. These subsidies, first expanded by the American Rescue Plan, have enabled 4 out of 5 enrolled Americans to find health insurance for less than $10 per month on HealthCare.gov. 

Get Covered NJ Logo

This just in via the New Jersey Dept. of Banking & Insurance (via email for now):

Statement from New Jersey Department of Banking and Insurance Commissioner Caride on President Biden’s Enactment of the Inflation Reduction Act  

TRENTON – New Jersey Department of Banking and Insurance Commissioner Marlene Caride today released the following statement on the signing by President Biden of the Inflation Reduction Act:

With the signing of the Inflation Reduction Act, President Biden and Congress have preserved a lifeline to health insurance for millions of Americans. For New Jersey, this means the preservation of record levels of financial help that have made health insurance through Get Covered New Jersey more affordable for hundreds of thousands of New Jersey residents.

MNsure Logo

via MNsure, Minnesota's ACA exchange:

ST. PAUL, Minn.—Today, President Biden signed into law a sweeping investment in health care affordability for Americans that will help keep health care costs in check for over 70,000 Minnesotans.

The new federal legislation, called the Inflation Reduction Act, extends enhanced subsidies for private health plans purchased through MNsure, Minnesota’s health insurance marketplace. First introduced in 2021 as part of the American Rescue Plan, the enhanced subsidies made existing tax credits more generous and expanded eligibility for tax credits to include more middle-income families. The average annual savings for MNsure enrollees is $6,100 per household for 2022.

Connect for Health Colorado Logo

via Connect for Health Colorado, Colorado's ACA exchange:

DENVER— Today, President Biden signed the Inflation Reduction Act into law. In addition to tackling issues such as climate change, health care and prescription drug costs, the legislation will extend the expansion of Affordable Care Act marketplace premium tax credits through 2025.

Connect for Health Colorado’s Chief Executive Officer, Kevin Patterson, released the following statement: