Advanced Premium Tax Credits, Rate Changes, and the Impact on the Individual Exchange Market

A significant share of enrollees covered through the individual Marketplaces qualified for Advanced Premium Tax Credits (APTCs or Premium Subsidies). For these individuals, their net contribution is determined by their household composition, income, and the cost of the 2nd lowest silver plan that they are eligible for. Due to market dynamics and the leveraging impact of subsidies, these individuals may be exposed to large contribution volatility going into 2015.

This suggests first and foremost that there would be increased need for support for these newly covered individuals before and during open enrollment. Additionally, it highlights the potential for ongoing enrollment turnover across issuers and products in the individual exchange market, as individuals consider the trade-offs between premium affordability and stability (including the ability to retain existing physicians in-network).

Advanced Premium Tax Credits, Rate Changes, and the Impact on the Individual Exchange Market

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