The Challenges of Pricing Health Insurance for the 2014 Exchanges

By: Alice F. Rosenblatt, FSA, MAAA, CERA, AFR Consulting, LLC

The ACA has introduced sweeping market changes that bring new uncertainty to the task of developing premiums for products to be offered in the health insurance exchanges beginning in 2014. The added complexity greatly increases the chances that these premiums will be off the mark. In this essay, Alice Rosenblatt explains how actuaries set premiums, shows how key provisions of the ACA will affect their pricing for the October 2013 open enrollment period and describes what’s at stake if they don’t get it right.