American Academy of Actuaries: Drivers of 2021 Health Insurance Premium Changes: The Effects of COVID-19

The 2021 individual and small group health insurance premium rate filing process is underway. Actuaries develop proposed premiums based on their projections of medical claims and administrative costs for pools of individuals or groups with insurance. Projected medical claims reflect unit costs and utilization levels, as well as the mix and intensity of services, all of which can vary by geographic area and from one health plan to another. The composition of risk pools is also important, as medical claims will reflect the health status of individuals in the risk pool. Laws and regulations—such as benefit requirements, issue and rating rules, and risk-sharing programs—can affect the composition of risk pools and projected medical spending, as well as the amount of taxes, assessments, and fees that need to be included in premiums.

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