The Affordable Care Act and Claims Costs

Posted on September 24, 2013 by


A friend of mine posted the following graphic on Facebook:











The graphic was posted on the Independent Journal Review site and is based on a March 2013 article “Cost of the Future Newly Insured under the Affordable Healthcare Act (ACA)” sponsored by the Society of Actuaries. The paper states that “… the ACA’s affect on premium is not modeled in this research; rather, long-term relative claims cost is modeled. Many aspects of the ACA will affect premiums, including changing benefit designs, new taxes and assessments, federal risk mitigation programs, minimum loss ratio rules, rate review rules, and premium subsidies.” (p. 4) The summary data presented in the graphic assumes that all ACA provisions are implemented by 2014 and shows results that would be expected by 2017 (p. 7).

This data illustrates that the costs of non-group per member per month claims are predicted to increase by 31.5% on average across the nation. This metric is not premiums per se, but premiums should be directly related to claims costs.

Posted in: Obamacare