Using Premium Rate and Medical Loss Ratio Data to Assess Insurers' Financial Performance, Round 6

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The Affordable Care Act's marketplaces approach their fifth open enrollment period amid considerable uncertainty about their future. This ongoing project provides baseline data on the stability of the individual market and insurers' financial performance to enable assessment of changes to the ACA. The research team identifies drivers of premium growth in the individual market, both in and outside the marketplaces, as well as year-to-year changes in insurers' medical claims, administrative costs, and financial performance. It also provides insight on emerging policy issues, like a recent assessment of how the elimination of cost-sharing reduction payments would affect insurers' bottom lines. The team of Mark Hall and Michael McCue will: assess insurers' financial performance in 2016 and their rate-setting practices and justifications for 2018; examine the number of insurers offering plans inside and outside the marketplaces in 2018 compared to previous years; update other components of previous work; and examine the evolution of the individual market since the ACA's enactment and possible reasons for market weakness. The team will obtain data on premium rates and medical loss ratios from the Center for Consumer Information and Insurance Oversight and data on market composition and insurer characteristics from the National Association of Insurance Commissioners. This research will inform regulators, policymakers, and the media about the functioning of the individual insurance market in 2016 and the effects of policy and regulatory changes on insurers' rate justifications for 2018. By looking at the primary drivers of insurers' rate increases and the ability of the ACA's reinsurance program to offset increased claims, the study will also inform policy options to stabilize the marketplaces.

Grant Details

Grantee Organization:
Wake Forest University Health Sciences
Principal Investigator:
Mark Hall, J.D.
Award Amount:
$182,006.00
Approval Date:
July 11, 2017

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