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Summary and Analysis of Milliman Report on the Impact of the Affordable Care Act’s Underwriting Reforms and the Exchange on Individual Health Insurance Premiums in California

The full report is available for download:
Summary and Analysis of Milliman Report Summary and Analysis of Milliman Report.pdf

The Affordable Care Act makes a number of changes to assure access for everyone to the individual market; these include guaranteed issue, guaranteed renewal, no pre-existing condition exclusions, essential health benefits, refundable tax credits and the Exchange (a purchasing pool for individuals). Features such as guaranteed issue and no pre-existing condition exclusions increase the cost of coverage because they allow individuals who are excluded due to their medical condition to purchase coverage. Features such as refundable tax credits that pay both for the cost of premiums and for individuals’ out of pocket costs (copays and deductibles) reduce the costs of care and coverage. These changes impact the individually insured and the uninsured Californians with incomes in excess of 133% of the federal poverty level (FPL).

Milliman has recently released its actuarial analysis of the impact of these reforms on the California individual market. California’s existing regulation of the individual market is quite minimal as compared to other states; this allows for lower premiums and more frequent exclusion of individuals with some form of medical condition or medical treatment.

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