An Early Look at 2021 Premium Changes on ACA Exchanges and the Impact of COVID-19 on Rates

Each year, insurers planning to offer health plans on the Affordable Care Act (ACA) marketplaces must submit filings to state regulators detailing their plan offerings and justifying their premiums for the upcoming year. Rates and participation are not finalized until late summer and not all are publicly available until early fall, but preliminary filings provide a glimpse into the assumptions insurers are making about the effects the coronavirus pandemic will have on health costs, enrollment and utilization in 2021.

In this brief, we summarize preliminary premium rate filings in the 10 states and the District of Columbia where filings have been made publicly available in a way that allows us to see how premiums are calculated. We reviewed published filings for the overall average premium increase across all plans and any language or estimate attributing a portion of the rate change to the impacts of the coronavirus pandemic. Thus far, many rate changes for 2021 appear to be moderate, with increases or decreases of a few percentage points. However, because many insurers have not yet incorporated a rate impact from the pandemic, it is too soon to say how Marketplace premiums will change next year.

We find that overall proposed rate changes range from a 12.0% decrease to a 31.8% increase, with more than half falling between a 2.0% decrease and 6.0% increase. Of the 63 filings reviewed for this brief, 27 (43%) elected not to factor in potential coronavirus-related costs to their initial proposed premiums due to uncertainty, citing a lack of information and the evolving nature of the pandemic. Many insurers also noted that the economic impacts of the pandemic will have volatile effects on enrollment in 2021, causing enrollees to move in and out of the market in ways that couldn’t yet be accurately predicted. These insurers indicated that they would continue to monitor the pandemic and potentially revise their proposed rates based on their experience and as more data become available.

23 of the 63 filings (37%) included information on the projected effects of the pandemic on their rates for next year. Among these insurers, the expected impact of COVID-19 on 2021 premiums ranges from a 1.2% decrease to an 8.4% increase, with more than half falling between 1.0% and 4.0% increases. Most noted that the pandemic would put both upward and downward pressure on costs for 2021. Insurers commonly referenced increased testing, the potential for widespread vaccination, and the return of delayed medical services as reasons to expect increased claims costs in 2021. Other insurers noted that claims costs could be dampened in 2021 due to deferred or avoided care conditions other than COVID-19 that would result from a second wave of infections, highlighting that these premium adjustments are made using highly uncertain assumptions about the pandemic which vary from insurer to insurer. (For more discussion on these upward and downward effects, see our earlier brief.) A few insurers estimated that these factors would cancel each other out and the net impact of COVID-19 on 2021 premiums would be zero. Others did not mention the pandemic in their filings.

The following table details overall rate changes among publicly available filings and any factor attributable to COVID-19:

Table 1: Proposed Rate Increase and COVID-19 Factor
State/Insurer Proposed Rate Increase Impact of COVID-19 on Rates
District of Columbia
CareFirst HMO (Blue Choice) 14.7% Not yet factored in
CareFirst PPO -0.6% Not yet factored in
Kaiser Foundation Health Plan -1.97% Not yet factored in
Hawaii
Hawaii Medical Service Association -2.0% No mention
Kaiser Foundation Health Plan -1.06% No mention
Kentucky
Anthem Health Plans of Kentucky 16.62% 4.5%
Care Source Kentucky 5.3% Redacted
Maine
Anthem Health Plans of Maine -1.1% 2.5%
Harvard Pilgrim Health Plan 0.4% Not yet factored in
Maine Community Health Options -10.2% -1.2%
Maryland
CareFirst Blue Choice -1.1% Not yet factored in
CareFirst CFMI -12.0% Not yet factored in
CareFirst GHMS -12.0% Not yet factored in
Kaiser Foundation Health Plan -11.0% Not yet factored in
Optimum Choice (UnitedHealthcare) New Entrant Redacted
Michigan
Blue Care Network of Michigan 2.5% No mention
Blue Cross Blue Shield of Michigan 1.7% No mention
Oscar Insurance Company 6.0% 4.0%
McLaren Health Plan Community -2.0% Not yet factored in
Meridian Health Plan of Michigan 2.7% 8.6%
Molina Healthcare of Michigan 0.4% Not yet factored in
Physicians Health Plan 3.1% 3.0%
Priority Health Insurance -0.12% Not yet factored in
Total Health Care USA -0.39% Not yet factored in
New Mexico
Molina Healthcare of New Mexico -0.17% Redacted
New Mexico Health Connections 31.8% Redacted
Blue Cross Blue Shield of New Mexico (HCSC) 3.56% Redacted
True Health 4.0% No mention
Friday Health Plans New Entrant Not yet factored in
Western Sky Ambetter New Entrant Not yet factored in
New York
Capital District Physicians Health Plan 4.26% 0.0%
Health Insurance Plan of Greater New York (Emblem) 9.5% 2.0%
Excellus 1.51% 0.5%
Fidelis (NY Quality Healthcare Corp) 18.82% 8.4%
Healthfirst PHSP, Inc. 2.36% 0.0%
Healthnow New York -1.94% 2.0%
HealthPlus HP (formerly Empire) 16.64% 5.15%
IHBC -3.67% 0.0%
MetroPlus 9.58% 2.1%
MVP Health Care 6.74% 1.6%
Oscar 19.1% 7.4%
UnitedHealthcare of New York 13.79% 1.0%
Oregon
Bridgespan Health Company 11.1% Not yet factored in
Kaiser Foundation Health Plan of the Northwest -3.51% Not yet factored in
Moda 4.7% 0.9%
PacificSource Health Plans 4.2% Not yet factored in
Providence Health Plan 2.4% 1.0%
Regence Blue Cross Blue Shield 2.5% Not yet factored in
Vermont
Blue Cross Blue Shield of Vermont 6.34% Not yet factored in
MVP Health Care 7.34% 1.3%
Washington
Bridgespan Health Company 0.03% Not yet factored in
Regence BlueShield -2.71% Not yet factored in
Lifewise Health Plan of Washington 3.44% Not yet factored in
Premera Blue Cross -8.99% Not yet factored in
Providence Health Plan 2.99% No mention
Regence Blue Cross Blue Shield of Oregon -4.71% Not yet factored in
Kaiser Foundation Health Plan of Washington -4.87% Not yet factored in
Kaiser Foundation Health Plan of the Northwest -1.93% No mention
Molina Healthcare of Washington 0.27% 3.0%
Community Health Network of Washington New Entrant No mention
UnitedHealthcare of Oregon New Entrant 2.5%
Coordinated Care Corporation 2.1% Not yet factored in
PacificSource Health Plans 3.54% Not yet factored in
Overall
25th percentile -1.5% 1.0%*
Median 2.4% 2.0%*
75th percentile 5.3% 3.5%*
*Among plans that estimated impact of COVID-19.
SOURCE: KFF analysis of insurer rate filings to state regulators.

The impacts of COVID-19 on rates indicated in the table above primarily reflect adjustments that insurers have made to their expected claims costs for 2021. In addition, some insurers also noted that the heightened uncertainty caused by the pandemic would impact their 2021 experience in other ways, but it was not possible to determine exactly what share of these impacts were attributable to the pandemic and what share were due to other factors, so they are not accounted for in the table. For example, some insurers added extra amounts to their contingency or risk charges to compensate them for taking the additional risk posed by COVID-19, like especially volatile enrollment or unexpectedly high hospitalization rates.

As a number of insurers have not yet incorporated rate impacts of the pandemic in their overall rate changes for 2021, the rates initially proposed are likely to change over the course of state review. We expect to update this table when filings in more states become available and when insurers update their rate requests.

Methods

Data were collected from health insurer rate filing submitted to state regulators. These submissions are publicly available for the states we analyzed. Most rate information is available in the form of a SERFF filing (System for Electronic Rate and Form Filing) that includes a base rate and other factors that build up to an individual rate.