Stable Rates Reflect Strength of ACA Marketplaces

Joel Ario, Manatt Health and Sabrina Corlette, Georgetown Center on Health Insurance Reforms

The start of the 2021 rate review process for the Affordable Care Act (ACA) Marketplaces coincided with the initial outbreak of COVID-19 cases, and early forecasts were ominous, with rate increases projected as high as 40 percent. There was also widespread concern about how to set rates when insurers’ COVID-related costs looked anything but predictable. In short, it looked like, after a period of relative stability in Marketplace rates, enrollees might be in for a rollercoaster ride.

Thankfully, the worst-case scenarios did not materialize, partly because the costs of treating COVID were lower than expected, and insurers benefited from enrollees deferring or canceling care in the early months of the pandemic. That is not the whole story, however. The failure to beat back the virus over the summer and the emergence of new treatments as well as a potential vaccine extended the uncertainty for insurers over their 2021 costs. This could have led to a turbulent rate review process were it not for the lessons learned in prior years about effective rate regulation. In a recent Expert Perspective for the State Health & Value Strategies program, CHIR’s Sabrina Corlette and Joel Ario from Manatt Health examine the factors that contributed to stable rates for 2021. You can read the full post here.

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