Factors driving anticipated increase in ACA premiums for 2024

Jul 10, 2023

Health insurance costs are expected to increase for Affordable Care Act (ACA) plans in 2024 due to several factors. A study by KFF shows that insurers anticipate a median 6% rise in premiums, with most increases falling between 2% and 10%. The main reason behind these higher premiums is the rising prices of healthcare services. While health prices typically increase annually, inflation from the broader economy is now influencing the healthcare sector as well. This trend is observed not only in the ACA individual market but also in small-group market filings.

Insurers and healthcare providers usually negotiate contracts for a year or longer, causing medical inflation to lag behind the rest of the economy. Looking forward, many insurers predict that the broader economic inflation will affect the healthcare system, pushing up premiums. The rise in inflation is also impacting insurers’ administrative costs, including staffing. Other factors influencing the premium rates include the end of the public health emergency related to COVID-19. Most insurers expect pandemic-related costs to decrease in 2024, slightly reducing premiums.

Some people who were disenrolled from Medicaid might enroll in ACA marketplaces, potentially affecting premiums. The use of diabetes and weight-loss drugs is also driving up pharmaceutical spending for insurers. The Inflation Reduction Act (IRA) is extending enhanced subsidies through 2025, lowering premium costs for many consumers in the market. While most enrollees receive subsidies and don’t pay the full premium, these premium increases can still impact federal spending. The factors driving these increases reflect the broader trends influencing healthcare costs in 2024.

Recent Posts

Unlocking Measurable Results Through Strategic Healthcare Partnerships

Unlocking Measurable Results Through Strategic Healthcare Partnerships

Revolutionizing Healthcare at the Community Level In the relentless battle to curb escalating healthcare costs, it's imperative that your clients recognize their power to revolutionize healthcare, enhance plan choices, and bolster affordability. However, achieving...

Improving company culture and retaining happy talent on your team

Improving company culture and retaining happy talent on your team

In today's fast-paced work environment, where productivity is paramount, it's crucial not to overlook the importance of active listening. While achieving tasks efficiently is essential, taking the time to listen to your employees' concerns, whether they are personal...

Open Enrollment that Rocks!

Open Enrollment that Rocks!

In today's corporate landscape, an organization's success hinges on its people. Central to this is the indispensable role of the human resources (HR) team in ensuring employee satisfaction and support. Employees won't hesitate to explore new opportunities if they feel...