Health insurance premiums in the USA are likely to increase at a rate higher than inflation in 2024, according to the American Academy of Actuaries.
Healthcare costs in the US are outpacing inflation and higher contract reimbursement rates with healthcare providers are exerting upward pressure on premium rates, the body said.
Joyce Bohl, chairwoman of the academy’s individual and small group markets committee said: “While there are some recent signs that the top-line inflation that consumers hear about in the news is moderating, higher healthcare and provider costs are putting upward pressure on premium rates for next year – maybe even more so than when this year’s premium rates were developed in 2022.”
Inflation, changes due to the end of the Covid-19 public health emergency, and shifts in the health coverage options offered by small employers top the reasons why health insurance premium rates for next year could see some changes, according to the Drivers of 2024 health insurance premiums report.
“Other factors that could affect 2024 premiums include the shifting payment responsibility for Covid-19 vaccines and tests from the federal government to carriers,” the report said.
“This shift could increase premiums, potentially offset by reduced carrier coverage of at-home tests.
“In addition, a continued shift of small groups from fully insured plans to other funding arrangements such as self-funded or level-funded plans could put upward pressure on small group premiums,” it said.
Other drivers
Other possible drivers of 2024 premium rate changes include:
- new federal rules taking effect next year standardising Affordable Care Act (ACA) plan requirements and limiting non-standard plans;
- trends in telemedicine utilisation;
- and state-level health policies and initiatives such as “public option” plans and reinsurance programmes.
But the extent of price increases is still uncertain.
“Although the uncertainty in predicting healthcare utilisation and spending created by the effects of Covid-19 pandemic has subsided, the end of the public health emergency (PHE) and changes in market regulations for 2024 introduce new sources of uncertainty into health spending projections,” the report continued.
“Finally, all healthcare is local, and rate changes will likely vary between individual and small group plans within the same geographic area, as well as variations between geographic regions.”