After suffering from years of losses, the U.S. health insurance industry figured out how make money in the individual major medical insurance in 2017, a new analysis shows.
The secret? Raising their prices.
The average cost of health insurance plans sold in the individual market climbed about 22% in 2017, as insurers boosted premiums well above what they spent on medical care. That left many in a profitable position for the first time since 2014, when major Affordable Care Act provisions went into effect, according to a Kaiser Family Foundation report released Thursday.
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Foundation analysts found that average gross margins per member per month increased to $78.52 in 2017, up from $14.36 in 2016, and up from $37.44 in 2013.
A copy of the full report is available here.
Foundation analysts included ACA-compliant major medical medical plans sold outside the ACA public exchange system as well as exchange plans.