The current political environment in Washington,D.C. has caused “new uncertainty” in the Affordable Care Actmarketplaces, prompting some insurers to factor this into theirdouble-digit premium increases on exchange plans for the comingyear, according to a report released today by the KaiserFoundation.

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The report, “An Early Look at 2018 Premium Changes and InsurerParticipation on ACA Exchanges,” says “Insurers have beenunsure whether the individual mandate — which brings down premiumsby compelling healthy people to buy coverage — will be repealed byCongress or to what degree it will be enforced by the TrumpAdministration.

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“Additionally, insurers in this market do not know whether theTrump Administration will continue to make payments to compensate insurers forcost-sharing reductions, which are the subject of a lawsuit, orwhether Congress will appropriate these funds,” the reportsays.

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Some insurers explicitly factor this uncertainty into theirinitial premium requests, while other companies say if they do notreceive more clarity or if cost-sharing payments stop, they plan toeither re-file with higher premiums or withdraw from the market,according to the report. An additional factor driving rates thisyear is the return of the ACA’s health insurance tax, which adds anestimated 2 to 3 percentage points to premiums.

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The foundation analyzed preliminary premiums and insurerparticipation in the 20 states and the District of Columbia wherepublicly available rate filings include enough detail to be able toshow the premium for a specific enrollee. The analysis focused onthe second-lowest cost silver plan in the major city in each state,as this plan plan serves as the benchmark for premium tax credits.Enrollees must also enroll in a silver plan to obtain reduced costsharing tied to their incomes.

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Across these 21 major cities, based on preliminary 2018 ratefilings, the second-lowest silver premium for a 40-year-oldnon-smoker will range from $244 in Detroit to $631 in Wilmington,Delaware, before accounting for the tax credit that most enrolleesin this market receive.

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The steepest proposed increases in the unsubsidizedsecond-lowest silver plan are in Wilmington (up 49 percent from$423 per month to $631 for a 40-year-old non-smoker), Albuquerque(up 34 percent from $258 to $346), and Richmond, Virgina (up 33percent from $296 to $394). Meanwhile, unsubsidized premiums forthe second-lowest silver premiums will decrease in Providence,Rhode Island (down 5 percent from $261 to $248 for a 40-year-oldnon-smoker) and remain essentially unchanged in Burlington, Vermont($492 to $491).

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Insurers assuming the individual mandate will not be enforcedhave factored in to their rate increases an additional 1.2 percentto 20 percent, according to the report. Those assuming cost-sharingsubsidy payments will not continue have applied an additional rateincrease ranging from 2 percent to 23 percent.

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“Because cost-sharing reductions are only available in silverplans, insurers may seek to raise premiums just in those plans ifthe payments end,” the authors write. “We estimate that silverpremiums would have to increase by 19 percent on average tocompensate for the loss of CSR payments, with the amount varyingsubstantially by state.”

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The foundation stressed that the data in its report ispreliminary, as states are still reviewing premiums andparticipation. Rates and participation are not locked in until latesummer or early fall, as insurers must sign an annual contract bySept. 27 in states using Healthcare.gov.

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“Although the individual market on average has beenstabilizing,” the report says, “the concern remains that anotheryear of steep premium increases could cause healthy people —particularly those buying off-exchange — to drop their coverage,potentially leading to further rate hikes or insurer exits.”

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