ANALYSIS OF THE IMPACTS OF TAX ON HEALTH INSURANCE IN YEAR 2020 AND LATER

Report from Oliver Wyman

The highlights of our findings are as follows:

Using publicly available data, Oliver Wyman endeavoured to replicate the CMS premium estimate. Our analysis estimates a decrease in annual premiums from $393.05 in 2018 to $382.96 in 2019 (or 2.6%). The difference in member premium estimates relative to those shown by CMS in its September 28, 2018 announcement may be because CMS uses a different dataset and methodology.

We find that national average MA member premiums may have increased by up to 55.7%, from $393.05 per year to $612.09 per year, if the moratorium on the ACA Health Insurance Tax were not in place for 2019.

Premiums by state vary considerably, thus the increases that would have been in place without the moratorium also vary, from 15% in Michigan to 435% in Vermont.

MA plans would have had the ability to make other changes to minimize the impact of the Health Insurance Tax, including reducing benefits (higher copays or less supplemental benefits), improving medical management activities or lowering other non-benefit costs.

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