2027 Rate Changes - Virginia: +16.7% individual market; +11.7% sm. group market

ACA exchange enrollment has dropped by 8% in Virginia since Congressional Republicans allowed the enhanced federal subsidies to expire at the end of last year.

Initial signups during Open Enrollment were only down ~5% vs. OEP 2025...but effectuated enrollment was down 6.3% year over year as of January and 8.1% as of February.

That's nearly 30,000 Virgnians who lost healthcare coverage in the first two months of the year.

Here's what this looks like visually, with both 2025 and 2019 (the last pre-COVID year, which didn't include the enhanced subsidies) included for comparison:

Looking ahead to 2027, the preliminary rate filings for both the individual and small group markets are now available via the federal Rate Review database:

ANTHEM HEALTH PLANS:

The proposed rates have been developed from Anthem's 2025 ACA experience, blended with manual rates. The legal entity specific ACA experience has been assigned 71.17% credibility in the rate development.

The proposed annual rate change is 9.1%, with rate changes by plan from 8.9% to 9.9%. This range is based on the renewing plans, and are consistent with what is reported in the Unified Rate Review Template. Exhibit A shows the rate change for each plan.

Factors that affect the rate changes for all plans include:

• Emerging experience different than projected.
• Trend: This includes the impact of inflation, provider contracting changes, and changes in utilization of services.
• Morbidity: There are anticipated changes in the market-wide morbidity of the covered population in the projection period.
• Benefit modifications, including changes made to comply with updated AV requirements.
• Changes in taxes, fees, and some non-benefit expenses.

...As required by 14 VAC 5-130-70 B 13, the membership that is subject to this rate increase is 3,413. The premium for this membership in the most recent 12 months is $25,606,672. This corresponds to the premium in Worksheet 1 of the URRT less MLR rebates.

CAREFIRST BLUECHOICE:

(ACTUARIAL MEMO HEAVILY REDACTED)

GROUP HOSPITALIZATION & MEDICAL:

(ACTUARIAL MEMO HEAVILY REDACTED)

HEALTHKEEPERS (ANTHEM):

Anthem HealthKeepers, Inc. has made an application to the Virginia Bureau of Insurance for premium rate changes for its fully ACA-compliant individual health plan products. This filing includes an average rate increase of 12.6%, excluding the impact of aging, effective January 1, 2027. The range by plan is between 9.4% and 16.5%. This increase will impact approximately 120,000 Virginia members renewing in 2027 with Anthem. We expect a minority of members will receive an increase greater than 15%. A subscriber’s actual rate could be higher or lower depending on geographic location, age characteristics, dependent coverage, and other factors.

Financial Experience

Anthem expects the proposed rate increase will cover projected medical trends and yield a medical loss ratio of 84.8% on an ACA basis, meaning more than eighty-four cents of each premium dollar are expected to go to covering our members’ medical expenses and improving health care quality. This projected MLR of 84.8% exceeds the minimum MLR requirement of 80% as defined in the Affordable Care Act (ACA). In the event Anthem's MLR is less than the Federal required minimum for a three-year period, Anthem will refund the difference to policyholders.

Drivers of Rate Increase

The main drivers of increase are associated with increases in the price of services primarily from hospitals, physicians and pharmacies, coupled with our members increasing their use of health care services, also called “utilization”. Increases in the price of services are driven by technology advances, new medications, and a variety of other factors.

Additionally, rate increases are driven by continuing effects from the ending of enhanced advance premium tax credits (ePTCs). This increase to out-of-pocket premiums causes healthy members to drop coverage, driving up morbidity for the underlying population. As a result, the remaining population utilizes more services per capita and drives up premium costs.

Anthem is committed to working to hold down the cost of insurance. We continue to offer innovative collaboration with providers such as our EPHC program with primary care doctors. We negotiate deeper discounts at our hospitals. And we provide members with tools to make informed decisions about where and how to receive treatment.

KAISER FOUNDATION OF THE MID-ATLANTIC:

The filed overall average premium rate change for January 1, 2027, is 11.80%. We have estimated that premium rate changes by member, for those enrolled as of Feb 2026, will range between 7.8% and 27.0%. This includes the impact of benefit and cost sharing changes, medical inflation, changes in the morbidity of the risk pool and impacts from regulatory changes where applicable. This average premium rate change does not indicate that every member’s rate will change by this amount. Premium rates are affected by the ages of those covered, family coverage and the benefit plan chosen.

...31 renewing plans and 2 new plans are represented by this filing, with two plans being discontinued. For the renewing plans, primary factors that affect the rate change for these plans are:

• Claims experience of the single risk pool different than projected in the previous year.
• Medical inflation including increases in unit cost per service and utilization of services.
• Changes in population morbidity and demographic make-up of the pool.
• Risk adjustment transfer payments into the statewide risk adjustment pool.
• Benefit plan design adjustments, including those made to comply with Actuarial Value (“AV”) requirements. This results in varying rate changes by plan.
• Changes in CSR defunding loads related to changes in the distribution of subsidy eligible members across plans. The CSR defunding load results in varying rate changes between on exchange Silver plans and other plans.
• Federal and state taxes and fees.

The average rate change is 11.8% and the number of current members to which the proposed rate revision applies is 35,899 (14VAC5-130-70.) and assumes the state-based reinsurance program is active for 2027.

...We are projecting an annual increase in base medical claims costs of 5.9% based on our analysis of past medical cost trends and prior to adjusting for expected impacts of future morbidity and demographic changes.

Changes in Benefits

29 renewing plans and 4 new plans are represented by this filing. Cost sharing for some services have been made where needed to maintain plan Actuarial Values within the allowable ranges.

Administrative Costs and Anticipated Contribution to Surplus

We project an annual increase in administrative costs of 2.5% based on anticipated administrative expenditures and expect to pay 2.2% of premium towards state and federal taxes and fees. If assumptions underlying the rate increase are realized, we expect to contribute -13.6% of revenue or -$32.4 million towards surplus.

OPTIMUM CHOICE:

OCI is filing 2027 individual market rates with an average increase of 15.93%, ranging from 12.31% to 18.13% by plan. Variations reflect differences in plan design within a single risk pool. There are 5,954 individuals impacted as of April 13th, 2026.

Financial Experience of the Product

The premium collected in plan year 2025 was $122,104,921. Incurred claims net of reinsurance during this period were $73,565,610 and OCI is estimated to pay $26,100,590 into the risk adjustment program. The loss ratio, or portion of premium required to pay medical claims, for plan year 2025 is 76.63%.

Changes in Medical Service Costs

There are many different healthcare cost trends that contribute to increases in the overall U.S. healthcare spending each year. These trend factors affect health insurance premiums, which can mean a premium rate increase to cover costs. Some of the key healthcare cost trends that have affected this year’s rate actions include:

• Increasing cost of medical services: Annual increases in reimbursement rates to healthcare providers, such as hospitals, doctors, and pharmaceutical companies.
• Increased utilization: The number of office visits and other services continues to grow. In addition, total healthcare spending will vary by the intensity of care and use of different types of health services. The price of care can be affected using expensive procedures such as surgery versus simply monitoring or providing medications.
• Higher costs from deductible leveraging: Healthcare costs continue to rise every year. If deductibles and copayments remain the same, a higher percentage of healthcare costs need to be covered by health insurance premiums each year.
• Impact of new technology: Improvements to medical technology and clinical practice often result in the use of more expensive services, leading to increased healthcare spending and utilization.
• Reduction of premium subsidies: Expanded and enhanced federal premium tax credits for consumers expired at the end of 2025. As a result, there will be sicker members on average in the insurance pool as healthier members exit the market.

Changes in Benefits

Changes in benefits impact costs and therefore affect premium changes. Plan benefits are typically changed for one of three reasons: to comply with the requirements of the Affordable Care Act or state law, to respond to consumer feedback, or to address a particular medical cost issue to provide greater long-term affordability of the product.

The Affordable Care Act implemented requirements for the “value” that must be offered by plan designs in the Individual and Small Group markets. These are called “metal levels”. For a benefit plan to remain classified within a particular metal level from year to year, adjustments to deductibles, copayments or coinsurance are sometimes required. These adjustments impact the cost and therefore the premium increases for the plan.

Administrative Costs and Anticipated Margins

OCI works to directly control administrative expenses by adopting better processes and technology and developing programs and innovations that make healthcare more affordable. We have led the marketplace by introducing key innovations that make healthcare services more accessible and affordable for customers, improve the quality and coordination of healthcare services, and help individuals and their physicians make more informed healthcare decisions.

Taxes and fees imposed by the state and federal government are significant factors that impact healthcare spending and must be included as additional administrative costs associated with the plans. These fees include Affordable Care Act taxes and fees which impact health insurance costs and need to be reflected in premium. Another component of premium is margin, which is set to address expected volatility and risk in the market.

The requested rate change is anticipated to be sufficient to cover the projected benefit and administrative costs for the 2027 plan year.

OSCAR INSURANCE CO:

The purpose of this document is to present rate change justification for Oscar Health Plan of Virginia, Inc (Oscar’s) Individual Affordable Care Act (ACA) products, with an effective date of January 1, 2027, and to comply with the requirements of Section 2794 of the Public Health Service Act as added by Section 1003 of the Patient Protection and Affordable Care Act (ACA).

Using in-force business as of March 2026, the proposed average rate increase for renewing plans is 14.3%. Rate increases vary by plan due to a combination of factors including shifts in benefit leveraging and cost-sharing modifications. This rate increase is absent of rate changes due to attained age. The rate increase impacts an estimated 1,492 members.

2. Reason for Rate Increase(s)

The significant factors driving the proposed rate change include the following:

Medical and Prescription Drug Infl ation and Utilization Trends

The projected premium rates reflect the most recent emerging experience which was trended for anticipated changes due to medical and prescription drug inflation and utilization.

Administrative Expenses, Taxes and Fees, and Risk Margin

Changes to the overall premium level are needed because of required changes in federal and state taxes and fees. In addition, there are anticipated changes in both administrative expenses and targeted risk margin.

Prospective Benefit Changes

Plan benefits have been revised as a result of changes in the Center for Medicare and Medicaid Services (CMS) Actuarial Value Calculator and state requirements, as well as for strategic product considerations.

Anticipated Changes in the Average Morbidity of the Covered Population

Changes to the overall premium level are needed because of anticipated changes in the underlying morbidity of the projected marketplace.

Anticipated Changes in the Network Confi guration

Changes to the overall premium level are needed because of anticipated changes in the underlying network configuration and associated unit costs.

SENTARA HEALTH PLANS:

The average proposed rate increase of 22.9%, effective January 1, 2027 is expected to impact 157,966 members, based on March 2026 membership. The rate increase varies by plan, area, and tobacco usage, ranging between 0.1% and 28.0%. Rate changes vary by plan due to the impact of changes in benefits and rating adjustments to account for the non-funding of Cost Sharing Reduction (CSR) payments.

Financial Experience of the Product

After accounting for payments into the risk adjustment program, SHP has an overall risk-adjusted MLR of 110.3% in 2025. The proposed rate increase is intended to account for expected claims activity in 2027 given historical experience and any anticipated changes. With the proposed rate increase, the anticipated federal loss ratio is expected to be 85.8% overall in 2027.

Changes in Medical Service Costs

Medical trend for these products is anticipated to be an average of 8.5% per year on allowed claims. This was developed based on historical experience, as well as consideration for information available on changes in the cost of services due to general medical inflation and changes in the anticipated utilization of services. For 2027 cost projections, adjustments to 2025 allowed claims consider population changes and costs. This includes factoring in expected disenrollments and non-effectuated membership resulting from the expiration of enhanced premium subsidies established in the American Rescue Plan Act at the end of 2025. The expiration of these subsidies may lead to higher average statewide morbidity, potentially increasing overall medical costs.

Changes in Benefits

Changes in benefits have been made to these plans, leading to an aggregate 3.4% decrease in rates. Any impact of benefit changes is reflected in the proposed rate changes.

Administrative Costs and Anticipated Profits

SHP applies a risk margin of 2.0%, compared to -2.9% in 2026 pricing. SHP made a business decision in setting 2026 rates to accept a lower margin and minimize the rate increase impact to members, with consideration for the company’s capital position and financial viability. The lower 2026 rate increase was intended to provide greater stability of membership and allow Sentara to continue to drive improvements to profitability. 2027 pricing reflects a risk margin shifting closer toward market norms. Recent administrative expenses have been higher than originally estimated leading to higher projected administrative costs in 2027. As a result, the impact of changes in overall administrative expenses and profit and risk margin are expected to result in an increase of 9.2% to rates.

CIGNA is dropping out of the individual market nationally next year. Unfortunately, I don't know the actual effectuated enrollment for Cigna, CareFirst BlueChoice, Group Hospitalization & Medical Service (GHMS) or Sentara's off-exchange carrier, so I've had to make educated guesses for each. Marketwide, assuming my estimates are reasonably close, the weighted average 2027 rate hike being requested is around 16.7%.

Meanwhile, Virginia's small group market carriers are requesting a weighted average increase of 11.7% (technically that's not fully weighted since I don't know what CareFirst BlueChoice's enrollment is, but their average rate hike is almost identical to the weighted average of the other 10 carriers so it would only move the needle slightly no matter how high or low it is).