What’s Driving the Largest Health Insurance Rate Increases?
Although the federal government doesn’t have the authority to block health insurers from raising premiums by large amounts, the Affordable Care Act does require that insurers provide justification for increases of 10 percent or more for plans offered in the individual and small-group markets. For their newly updated Commonwealth Fund issue brief, Michael J. McCue of Virginia Commonwealth University and Mark A. Hall of Wake Forest University analyzed insurers’ explanations for these larger rate hikes taking place between July 2013 and June 2014.<br /><br />
Medical costs were the main reason insurers gave for raising premiums 10 percent or more, the researchers say. These costs reflected both higher unit prices and greater use of medical services. Only a very small portion of rate increases was attributed to ACA-related factors, like a new insurance tax and transitional reinsurance fee.