Lower Health Insurance Premium Increases in 2017?

Based on a suspension of an Affordable Care Act (ACA) tax in 2016 the rate of increase for single risk group health plans (fully insured) should see a reduction come January. The “Health Insurance Provider Fee” collection has been suspended in 2017 (for the 2016 calendar year) as a result of the passage of the Consolidated Appropriations Act of 2016.

As described in the Centers for Medicare & Medicaid Services (CMS) press release, “The (fee) is part of administrative costs for health insurance plans. Because the (fee) is not being collected for the 2017 fee year, administrative costs for plans in all impacted markets are expected to be adjusted appropriately to account for the moratorium.” We see this as a subtle suggestion to health insurance carriers that they succeeded in stalling this tax and, as a result, will be saving money; now be sure to pass that on to the consumer.

The amount not being collected in 2017, based on CMS fee calculations, is $13.9 billion. This money is used to fund the subsidy’s individuals receive to help them purchase health insurance on the individual, or direct, market. How the federal government will replace this shortfall hasn’t been discussed to date.

We certainly hope a future blog post in the fall of 2016 will be reporting good news in the form of lower premium increases for our clients ion 2017!