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Individual plans in every state are at risk for higher than normal premium increases for 2019 and beyond, according to an analysis by Covered California. Unsubsidized consumers would bear the full weight of higher premiums. Without federal action, states could see premium increases from 12 percent to 32 percent in 2019. The biggest sticker shock could be from cumulative premium increases by 2021. Individual plans in California could risk cumulative premium increases of 35 percent by 2021. Seventeen states could face 90 percent premium increases or higher, and 19 states could face 50 percent premium increases or higher.

A variety of factors may contribute to higher than normal increases including the recent decision to remove the federal penalty for being uninsured, the administration’s attempt to introduce new short-term plans that could damage the overall risk mix of consumer pools by siphoning off healthy consumers, and underinvestment in federal marketing and outreach.

National Projections of Individual Market Premium Changes: 2019-2021

Factors Affecting Premiums 2019 2020 2021
Medical Trend in the Individual Market


7% 7% 7%
Elimination of the Individual Mandate Penalty


7% to 15% 2.5% to 10% 2.5% to 10%
Lower enrollment in federally facilitated marketplace states because of less marketing and a shorter open enrollment period.


-2% to 9% 0% to 2% 0% to 2%
Association Health Plans and Short-Term Policies


0.3% to 1.3% .05% to 2% .05% to 2%
Total Increase Effect 12% to 32% 10% to 21% 10% to 21%
Total Cumulative Effect 36% to 94%

 Source: Covered California

Several policy actions at the federal and state levels could reduce premium increases:

  • State initiatives: New state policies could promote enrollment and protect consumers from new health insurance products that have huge gaps in coverage while siphoning off healthier people from individual market risk pools.
  • Reinsurance: Reinsurance programs can lower premiums and expenditures for premium subsidies. A nationwide reinsurance program with annual funding of $15 billion could reduce average premiums by 16 to 18 percent. A program funded with $15 billion would have a $5 billion net cost to the federal government due to reduced spending for the Advanced Premium Tax Credit.
  • Subsidies: Providing direct federal funding could be helpful by providing cost-sharing reduction subsidies to help low-income consumers with lower copays and deductibles.
  • Marketing: Spending more on marketing to promote enrollment among healthier individuals in federal marketplace states would yield a very positive return on investment.

The report was informed by actuaries at health insurance companies and academics at UCLA, UC San Diego and Harvard University, as well as a review of recent published reports. Milliman provided actuarial modeling. To view the report, click here.