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Health Insurance

Last Updated 8/07/2019

Issue: Despite efforts in recent years to stabilize health insurance markets, challenges remain in the affordability of coverage and consumers' access to needed care. Much of this has come as a result of the underlying costs of health care rising significantly faster than other goods and services. National health care expenditures now represent 17.8% of the gross domestic product1 and are expected to continue to grow. And while seniors are largely protected by Medicare, costly long-term care services remain outside of the program's benefits.

Background: The Affordable Care Act (ACA) aimed to improve the rate of health insurance coverage, especially for vulnerable populations; increase the value of coverage through market reforms; and limit cost growth by encouraging health insurers to compete on price and quality. ACA provisions like guaranteed issue, community rating, the prohibition on pre-existing condition exclusions, and premium subsidies have brought unprecedented access to individual market coverage to many. At the same time, compliance with ACA regulations and limited competition in some areas have driven premiums and cost sharing to unaffordable levels for those who don't receive subsidies and don't have access to other coverage. The Centers for Medicare and Medicaid Services (CMS) has reported insurer exits and rising premiums have priced out those who don't qualify for tax credits and don't have access to coverage through employers. According to CMS, unsubsidized enrollment dropped 20% during plan year 2017 and subsidized enrollment rose 3 percentage points to 87% in 2018.2

The Administration has worked to make alternative coverage options available to more individuals and employers through new policies related to association health plans, short-term, limited duration insurance, health reimbursement arrangements, and innovation waivers under the ACA. However, while benefiting some, these policy changes, combined with ongoing legal challenges to both the ACA and the Administration's regulatory actions, have elevated market and policy uncertainty for regulators and health insurance market participants.

Status: In 2019, the NAIC will continue to provide non-partisan advice to Congress and the Administration, particularly on efforts to stabilize individual and small group markets. It will also work to relieve consumers from surprise medical bills, including those from air ambulances. NAIC's committees will continue their work to develop model policies and highlight best practices on health care cost control. This includes reviewing long-term care insurance premiums, regulation of pharmacy benefit managers and education of consumers on health insurance and their coverage options.

Specifically, the Health Insurance and Managed Care (B) Committee will examine factors that contribute to rising health care costs and insurance premiums and review state initiatives to address cost drivers. It will also be a venue to continue NAIC members' engagement on state options to improve their markets using waivers under the ACA's Section 1332 and other regulatory flexibilities. In addition, the Consumer Information Subgroup of the (B) Committee plans to develop a series of resources to help consumers understand their coverage and get the most value from their plans. Further, NAIC staff is working to assist state insurance regulators in responding to requests for market data on short-term, limited duration insurance. They will also continue to facilitate discussions with federal officials on the impact of new regulations on association health plans.

The Center for Insurance Policy & Research (CIPR) will issue a study on health care cost drivers. Among the things the study will include is exploring a value-based reimbursement model, lifestyle changes, electronic health records (EHRs), technology-driven delivery channels and medical technology advances. The CIPR held an event focused on exploring health care cost drivers during the NAIC Fall National Meeting.

2 Ibid

Committees Active on This Topic

Additional Resources

CIPR Health Care Cost Brief
August 2019, CIPR Study

CIPR Health Care Cost Drivers Study - Second Installment
August 2019, CIPR Study

Rising Health Care Costs: Drivers, Challenges and Solutions
December 2018, CIPR Study

A Brief Exploration of Rising Health Care Costs
August 2018, CIPR Newsletter

Drivers of 2019 Health Insurance Premium Changes Issue Brief
June 2018, Academy of Actuaries (AAA)

Important Issues for Consumers, Insurers and Insurance Regulators
March 2018, CIPR Newsletter

Cost Drivers in Healthcare
March 2017, Alliance for Health Reform

Healthcare Cost Drivers White Paper
June 2015, National Association of Health Underwriters


Media queries should be directed to the NAIC Communications Division at 816-783-8909 or

Brian Webb
Health Policy Team Manager

NAIC Center for Insurance Policy and Research (CIPR)

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