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Some ‘Obamacare’ plans could see big rate hikes after lawmakers fail to agree on reinsurance program

Virginia, (Qnnflash) – Some Affordable Care Act health plans in Virginia might face substantial rate increases in 2024 due to the suspension of a widely supported reinsurance program that previously reduced premiums. The state’s reinsurance program, established in 2021, aimed to lower premiums by pooling expensive claims and using federal and state funds to cover them. While the program successfully lowered premiums this year, a lack of consensus among lawmakers has led to its potential suspension for 2024.

At a State Corporation Commission meeting, officials revealed that due to the absence of guidance from the politically divided General Assembly, the premium reduction target for the reinsurance program for 2024 was set at zero, effectively suspending the program. This decision could result in individual health plan rates increasing to levels seen before the reinsurance program was implemented.

Executives from insurance companies presented proposed rate increases for 2024, attributing the potential hikes to the discontinuation of the reinsurance program. The State Corporation Commission projected an average rate change of 28.4% for individual plans in 2024 based on rate filings, pending commission approval.

The failure of lawmakers to agree on the premium reduction goal is not unexpected, as private negotiations have been ongoing for months without apparent progress. The potential impact of the suspension on middle or higher-income individuals who pay full premiums, entrepreneurs, small-business owners, and gig economy workers has raised concerns. Advocacy groups have warned that the market could be thrown into turmoil, affecting older adults and individuals with chronic health conditions who rely on the individual market for coverage.

While it remains uncertain whether the reinsurance program can be reinstated for 2024, some officials are hopeful that a resolution can still be reached. A recent analysis indicates that “Obamacare” marketplace insurers across the country are seeking a median premium increase of 6% for the following year, with Virginia potentially experiencing one of the highest increases.

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