Virginia: 2026 ACA filing instructions offer a chilling reminder that premiums are about to get extremely ugly...

Every year around this time I start my annual individual & small group market rate filing analysis project. This involves spending months painstakingly tracking every insurance carrier rate filing for the upcoming year to determine just how much average insurance policy premiums on the individual market are projected to change.

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 in ACA-compliant policies this year; the average projected rate change for those policies; and, ideally, a breakout of the rationale behind the changes.

Usually the reasons given are fairly vague things like "increased morbidity" (ie, a sicker risk pool) or the like. Sometimes, however, there's a very specific reason given for some or all of the premium changes. Major examples of this include:

• 2017: 2 of the 3 "training wheel" programs included in the original ACA legislation expired (federal reinsurance and risk corridors)

• 2018: Trump 1.0 cut off Cost Sharing Reduction CSR) reimbursement payments to carriers

• 2019: Repeal of the federal Individual Mandate penalty

• 2021: Accounting for the impact of the COVID-19 pandemic on health insurance claims

For 2026, there's another major, looming factor which is very likely to cause significant premium increases: The expiration of the upgraded premium subsidies introduced by the American Rescue Plan Act and extended by the Inflation Reduction Act.

This upgrade finally brought the ACA's premium tax credits up to the levels they should have been in the first place while also removing the hated "subsidy cliff" which caused households which earn even $1 more than 400% of the Federal Poverty Level to lose eligibility to any federal subsidies at all.

Unfortunately, both of these improvements are scheduled to expire at the end of 2025 unless legislative action is taken by Congress, and as of this writing that seems pretty unlikely to happen (in fact, Congressional Republicans are on the verge of slashing funding for Medicaid by hundreds of billions of dollars).

According to the Congressional Budget Office (CBO), allowing the improved subsidies to expire will result in higher premiums and a higher uninsured rate:

Without an extension through 2026, CBO estimates, the number of people without insurance will rise by 2.2 million in that year. Without a permanent extension, CBO estimates, the number of uninsured people will rise by 2.2 million in 2026, by 3.7 million in 2027, and by 3.8 million, on average, in each year over the 2026-2034 period. (The initial increase is significantly smaller because CBO expects that some people will remain temporarily enrolled after the expanded credits expire at the end of 2025. CBO assumes enrollees would need time to fully respond to the expiration, for example, because of automatic renewal policies.)

...Without an extension through 2026, CBO estimates, gross benchmark premiums will increase by 4.3 percent, on average, for that year. Without a permanent extension, CBO estimates, gross benchmark premiums will increase by 4.3 percent in 2026, by 7.7 percent in 2027, and by 7.9 percent, on average, over the 2026-2034 period. (Similar to the effects on the uninsured population, the initial increase is significantly smaller because some people will remain temporarily enrolled.)

So, the CBO estimates that nationally, the average unsubsidized premium hike will be around 4.3% on average, though this will of course vary widely from state to state and carrier to carrier.

Virginia is usually the first state to ramp up their ACA market filing process, and this year is no exception. The VA State Corporation Commission just published a slideshow for VA insurance carriers featuring guidance for the 2026 Open Enrollment Period, which includes this slide:

• Expiration of enhanced federal subsidies
  • We require only one rate filing with the primary assumption that the enhanced federal subsidies go away in 2026.
  • Actuarial memorandum should provide detail of any rate impact from this change.  Additionally, the memorandum should indicate any rate impact if the enhanced subsidies (in the same form and amount) were to continue.
  • Carriers should submit an alternate Virginia ACA Rate Filing Template with the assumption that enhanced subsidies return in 2026 in the same form and amount as are present in 2025.

It will be interesting to see just how much Virginia carriers tack on because of the damage to their risk pool if the IRA subsidies expire.

Of course, even if 2026 premiums remained identical to what they are this year across the board, the loss of those subsidies will still be devastating for most enrollees. Any additional increase will simply be salt in the wound.