Health Care Enrollment, Costs Rising Even as Health Care Debate Keeps Raging

The healthcare reform debate keeps raging in Washington. But two trends are clear from our unbiased analysis of data from more than 1,600 individual health insurance companies: The number of Americans with health insurance continues to climb, and so do the costs of that coverage.

This is the case regardless of the fact a number of major insurers like Anthem, Inc. (ANTM, Rated “B”), Aetna Inc. (AET, Rated “C+”), Humana Inc. (HUM, Rated “B+”) and others are withdrawing from private healthcare exchange markets across the country.

Take a look at the chart below and you’ll see that the enrollment numbers have been on the rise since the beginning of 2009, with only some minor ups and downs along the way. On average, there were only 154.8 million Americans with health insurance in Q1 2009. This number rose 33.6% to 206.8 million by Q1 2017.

Zeroing in on recent history, average enrollment in Q1 2017 grew 2% over a one-year period and 0.4% since the end of 2016 – despite the intensifying debate about healthcare policy.

At the same time, health insurance premiums continue to climb. Back in Q1 2009, the average American paid $190 per month for his or her health insurance. This number reached $218 by mid-2013, and $252 by Q1 2017, as you can see here:

Keep in mind that these are average premium prices from across the country. Individual costs may vary significantly depending on where you live and on your individual health. But most importantly, insurance companies see no incentive to reduce prices as they are only allowed to make about 20% profit off the premiums, according to a provision of the Affordable Care Act.

More recently, President Trump has begun talking about reducing subsidies to insurance companies. These payments help insurers cover exceptional health costs, and are a lifeline to providing affordable health care coverage. Without them, even more companies will likely flee the market, leaving millions of Americans with even fewer options and much higher prices to pay for coverage.

The bottom line? No one knows for sure how the healthcare debate will sort out. That is a major question mark for the industry’s future. But our data shows that while the overall number of people covered by health insurance is still increasing, so is the cost of that coverage.

Think Safety,

Gavin Magor

Insurance Insights Edition, By Gavin Magor, Senior Financial Analyst Gavin has more than 30 years of international experience in credit-risk management, commercial lending and insurance, banking and stock analysis and holds an MBA. Gavin oversees the Weiss ratings process, developing the methodology for Weiss’ Sovereign Debt and Global Bank Ratings. Gavin has appeared on both radio and television, including ABC and NBC as an expert in insurance, bank and stock ratings and has been quoted by CNBC, The New York Times, Los Angeles Times, and Reuters as well as several regional newspapers and trade media.