The Affordable Care Act (ACA) Marketplaces opened for signups on November 1, marking the eleventh year that consumers can buy health insurance under the ACA and the third full year in which consumers can access increased premium subsidies due to the American Rescue Plan Act and subsequent Inflation Reduction Act. Overall, consumers will see a moderate increase in premiums for the lowest-cost plans in each of the silver and gold metal levels, and a slightly larger increase on bronze plans, on the federal Marketplace, according to an Oliver Wyman actuarial analysis.

The plan level data to unpack federal marketplace trends

Oliver Wyman utilized data from the Centers for Medicare and Medicaid Services to calculate rate changes relative to 2023 premiums for the 32 states on the federal Marketplace. We looked at the lowest-cost bronze (LCB), lowest-cost silver (LCS), second-lowest-cost silver (SLCS), and lowest-cost gold (LCG) plans by county and calculated the weighted-average rate change at each of those plan levels by state. These plan levels are important to consumers because they represent the lowest-cost plan at each of the specified metal levels that an individual or family seeking coverage through the federal Marketplace has access to, and the SLCS plans represent the benchmark premiums on which federal premium tax credits are based.

Some states will see significant rate changes, driven by competition 

Across all 32 states, the calculated average rate changes are: LCB: +6.2%, LCS: +3.5%, SLCS: +3.6%, and LCG: +3.2%. A summary of the calculated state-level average LCB, LCS, SLCS, and LCG rate changes is provided in the below map.

The 2024 average rate changes for the LCB, LCS, SLCS, and LCG plans vary by state — in some cases by a significant amount. Iowa has the lowest average rate change for LCB (-4.9%) and SLCS (-6.7%) plans, and a similarly low average rate change for the LCS (-6.9%) plans. This is driven by an average rate decrease that was implemented by the largest carrier in Iowa in 2024 and may also be attributed to carriers expanding their service areas, creating an increased level of competition in the state. Delaware also had low-rate changes across the specified plan levels (averaging -3.6%). Its competitive landscape has changed significantly in recent years as there was just one single carrier in 2022, whereas there will now be four carriers in 2024. Alaska is experiencing the highest average rate changes at all specified plan levels, ranging from +16.5% for SLCS plans to +17.4 for LCG plans. There are only two carriers who offer coverage in Alaska through the federal Marketplace, and both appear to have implemented larger rate increases for 2024.

The market is showing resilience amid inflation and carrier exits

Nationwide, the average rate changes are relatively moderate. Some observations related to this include:

• On April 1, 2023, states were able to begin the process of disenrolling individuals from Medicaid, marking the end of the continuous Medicaid enrollment provision that was put in place near the beginning of the pandemic. It is expected that some portion of the disenrolled individuals will or have already enrolled in Marketplace plans, leading to increased ACA enrollment and a potential impact on the morbidity of the ACA single risk pool. Based on the moderate rate changes that have been implemented for 2024, it appears many carriers may not have included large upward or downward adjustments in their pricing for the impact of Medicaid disenrollment.
• While inflation has remained high in the United States and health systems have faced financial pressures following the pandemic, the modest rate changes being observed indicate that, on average, health insurance carriers offering Marketplace coverage don’t anticipate either of those two items to put significant upward pressure on their costs for 2024.
• In 2023, Bright Health exited the ACA market and Friday Health Plans stopped enrolling members mid-year, with a full exit in 2024. These are two carriers that were relatively new to the ACA Marketplaces and who tended to be aggressive in both pricing and expansion. Based on the modest rate changes being observed for 2024, it doesn’t appear that the exit of these two carriers has dramatically impacted affordability levels in the market.
• While some carriers have exited the ACA market in recent years, the federal Marketplace remains very competitive, with several existing carriers continuing to expand their footprint. This competitiveness leads to continued aggressiveness by carriers in trying to have the lowest-cost metal plans in each county to capture or retain market share.

One final item to note is that the changes in rates for the LCS, SLCS, and LCG plans are, on average, very similar. Last year, we indicated that there had been an increased emphasis by some states to have carriers increase the CSR loads on their silver plans to maximize premium tax credits. There had also been a tightening of rating policy in some states in terms of the magnitude of induced utilization adjustments that carriers are allowed to apply at the richest metal levels when setting their rates. Both items would be expected to lead to differences in average rate changes by metal level, particularly between silver plans and gold plans. The similarities between the LCS, SLCS, and LCG average rate changes for 2024 indicate there were not widespread changes in the CSR load or induced utilization pricing approaches used by carriers and/or required by state regulatory agencies for 2024.