Cost is a big consideration for choosing health insurance. Some clients, particularly those considering health insurance for the first time or having recent life events, may not know what to expect. They could be unaware of the factors affecting cost of coverage, be unfamiliar with coverage options available, or lack information about costs beyond the premium (like copays and coinsurance). In short, you can deliver great value by helping them understand these factors, so they can make a decision for their family or small business.

When you meet a prospect or client, be prepared with information on (1) plan eligibility guidelines, (2) the coverage options available in your area, and (3) doctors and hospitals associated with each plan’s provider network. You should also be prepared to discuss the forecast for average health plan premiums, which are addressed below.

Premium Hikes Expected for 2023

Insurers are betting that inflation and more people going to the doctor’s office will require a double-digit spike in premiums for Affordable Care Act plans this year. The Kaiser Family Foundation released an analysis in July 2022 of early rates submitted by insurers for the ACA’s exchanges. It found that inflation and greater healthcare utilization were major drivers behind the premium spikes as well as the potential loss of enhanced ACA subsidies.

The biggest drivers behind the premium hikes are (1) cost inflation, (2) higher health service utilization and (3) uncertainty over renewal of ACA subsidies.

Across the 2023 filings, many insurers are expecting to 4% to 8% increase in healthcare costs. The cost trend reflects the rising prices paid to hospitals, doctors and drug makers due to inflation and expectations of patients’ increase in plan use next year. Specifically, insurers are also planning for healthcare use to rebound to pre-pandemic levels after being suppressed due to COVID-19.

Plans may have to shoulder costs that have previously been picked up by the federal government, including more costs for vaccines and boosters due to fewer mass-vaccination efforts. The American Rescue Plan Act boosted subsidies for 2021 and 2022, but those subsidies set to expire unless Congress acts before November.

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