What Explains the 21% Increase in 2017 Marketplace Premiums, and Why Do Increases Vary Across the Country?

Large 2017 ACA marketplace premium increases are due, to a great extent, to underpricing in earlier years of reform.

The Issue

Researchers find huge variation across states and rating regions in the average increase of the lowest-cost silver premiums in individual Affordable Care Act (ACA) marketplace plans.

Key Findings

• Factors affecting ACA marketplace premiums differ.
• In some states with large premium increases, few insurers participate in marketplace plans, so low levels of competition are driving up costs.
• In states with low premiums, competition levels tend to be higher and there are more insurers offering limited network plans to contain costs.

Conclusion

Arizona experienced the highest average increase, which was a highly publicized 125 percent, while the average premium for the low cost options in Arkansas decreased by 4 percent. ACA marketplace information for all 50 states and the District of Columbia can be found in the full report.

About the Urban Institute

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