The Effects of the ACA on Actuarial Pricing: How the Work of Health Actuaries Has Changed Post-ACA

In the United States, the Patient Protection and Affordable Care Act (PPACA or ACA) drastically altered the health insurance industry. Insurers are no longer able to deny coverage or charge higher premiums based on an individual’s medical history. In order to more evenly spread the financial risks associated with these ACA reforms among insurers and stabilize health insurance premiums, risk-sharing provisions dubbed the "3 R's" (risk adjustment, risk corridors, and reinsurance) were instituted in the individual and small group market. This thesis will begin with a discussion of the "3 R's" and the other ACA regulations that have had significant impacts on both actuaries and healthcare consumers. After having established the implications of these recent changes, health insurance premium data from the Washington Office of the Insurance Commissioner will be used to analyze the effects of specific health insurance rating restrictions implemented by the ACA.