SummaryOn April 14, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) released updated estimates on health insurance coverage provided through the ACA.
These estimates reflect the CBO’s most recent economic forecast, account for administrative actions taken and regulations issued through March 2014, and incorporate new data and various modeling updates. The CBO and JCT lowered its ACA cost estimate to $36 billion for 2014, $5 billion less than their previous projection; they also lowered the total cost from 2015 to 2024 by $104 billion to $1,383 billion. The CBO and JCT also estimate that the ACA will increase the proportion of the nonelderly population with insurance from approximately 80 percent, pre-ACA, to about 84 percent in 2014 and 89 percent in 2016 and beyond. Compared to February 2014 estimates, exchange enrollment for 2014 is stable, but new Medicaid enrollment is slightly down from 8 million to 7 million enrollees due to the ACA.
CBO and JCT estimate the exchange premiums are expected to rise less than three percent between 2014 and 2015. Accounting for exchange enrollee demographics, they estimate that the second-lowest silver plan in the exchanges is about $3,800 in 2014. That benchmark premium is expected to rise slightly in 2015 to about $3,900 and then increase more significantly thereafter, reaching $4,400 in 2016 and $6,900 in 2024.
These estimates project modest increases in premiums for next year. The analysts note that anecdotal reports to date on actual enrollee risk profile versus insurer projections have been mixed and provide no clear evidence that insurers have been substantially surprised by the health status of their enrollees. For 2015, some insurers will need to raise prices if they experience worse-than-expected risk, whereas others are signaling that the age distribution aligns with the expectations they used to set premiums this year. Local variations in pricing are likely to be significant. Over time, it will be important to continue to improve the mix of the risk pool to achieve long-term stability in the market.
With open enrollment now at a close, CBO and JCT have maintained exchange estimates at 6 million individuals for 2014. This is modestly below the 7.5 million reported by the federal government, although that statistic does not reflect enrollment attrition due to premium nonpayment.
With the Federally-Facilitated Exchange (FFE) and qualified health plan (QHP) application deadlines are fast approaching, application data will be made finalized this fall. Given these timelines, stakeholders will gain insight into 2015 pricing trends, although a more comprehensive picture will not be available until open enrollment launches November 15.