Health Insurance Exchanges Claims Costs and Federal and State Policies Drove Issuer Participation, Premiums, and Plan Design

GAO January, 2019

What GAO Found

Since 2014, when health insurance exchanges established by the Patient Protection and Affordable Care Act (PPACA) began operating, issuers’ medical costs for enrollees (claims costs) in the individual market have varied widely.

• Claims costs were higher than expected in early years (from 2014-2016). Reviewed studies and interviews with selected issuers indicate that claims costs for plans sold to individuals were higher than expected, in some
cases between 6 and 10 percent higher in 2014. This was due to enrollees being sicker than expected, higher costs for some services, and certain federal policies, such as initial policies for special enrollment periods that issuers were concerned allowed for potential misuse.
• Claims costs generally grew from 2014 to 2017, but...

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