ACA benchmark plan premiums increase in 2023 after reductions since 2019

Premiums for Affordable Care Act benchmark plans rose across the country over the past year, but Wisconsin faced an increase greater than the national average, according to a recent report.

For 2023, monthly premiums increased by 7.1 percent in Wisconsin on average. Between 2019 and 2022, the state’s premiums decreased on average by 5.3 percent each year. Average premiums across the country went down annually from 2019 to 2022, but, this year, benchmark plan premiums went up by an average of 3.4 percent.

More than 1 million Wisconsinites live in places with low population density. Analysts attributed differences between premium hikes in urban and rural areas to heightened competition in large cities, which drives lower rates.

“Rural healthcare is always going to be expensive,” said Urban Institute Fellow John Holahan, who worked on the report. “In an ideal world, big teaching hospitals would be incentivized (to expand) … If there are more providers, insurers can maybe negotiate better premiums.”

Inflation and an uncertain future of enhanced premium tax credits also contributed to the higher premiums. While subsidies were extended last fall, insurers needed to prepare in case tax credits did not continue, Holahan said.

“Rule of thumb is that, the more subsidized something is, the more healthy people will be more likely to buy insurance or go into a marketplace,” Holahan said. “If they have to pay more, some healthy people will just forgo, figuring they’re healthy enough.”

– Elizabeth Casolo for Wisconsin Health News