How did insurers justify rate filings after Biden's COVID-era ACA actions?

Executive summary — insurers said rising costs and subsidy changes drove their filings

Insurers publicly justified ACA premium rate filings after the Biden administration’s COVID-era subsidy expansions by pointing to rising medical and labor costs, enrollment shifts tied to enhanced Premium Tax Credits (PTCs), and uncertainty about subsidy expirations, which they said would worsen risk pools and drive up unit costs. Reporting across September–November 2025 shows consistent insurer rationales—median proposed increases ranged from about 15% to 18% in many analyses and, in some accounts, approvals produced average plan increases near 30%—while watchdog and policy pieces stressed the role of expiring enhanced PTCs in amplifying the consumer impact ^{[1] [2] [3]}.

1. How insurers put their case: direct claims about costs and risk

Insurers framed filings as a response to immediate cost pressures, citing higher medical utilization, rising unit prices for services, and increased labor and drug costs as the core drivers for proposed premium hikes; multiple analyses from late 2025 restate these insurer claims as central to filing narratives ^{[1] [2]}. Carriers also pointed to marketplace enrollment changes after the Biden-era enhanced subsidies—greater enrollment and shifts in the risk mix—arguing that if subsidies expire, the risk pool would become sicker on average, increasing expected claims per enrollee and justifying higher rates ^{[4] [5]}. Regulators’ role in approving rates and existing programs such as risk corridors and Medical Loss Ratio rules were invoked as context for why filings were structured the way they were, and why insurers highlighted these cost drivers in filings ^{[6] [3]}.

2. Numbers: how big were the proposed increases and why they mattered

Analysts reported median proposed increases around 15–18% across many states, with some reporting plan-level average hikes approaching 30%, and projections indicating that without enhanced PTCs, marketplace premiums for typical subsidized enrollees could more than double in dollar terms in 2026 scenarios ^{[1] [2] [5]}. These figures were used by insurers to justify filings to regulators and the public: carriers presented actuarial evidence that higher expected claim costs and uncertain subsidy policy would materially raise required revenue to meet medical obligations. At the same time, coverage advocates and policy analysts warned these insurer-justified rate increases would compound consumer harms if enhanced subsidies were allowed to lapse, sharply raising out-of-pocket premium burdens for millions ^{[4] [7]}.

3. Counterarguments and alternate explanations that appeared in reporting

Some analyses and critics questioned the insurers’ emphasis on subsidy-driven sicker risk pools and highlighted other drivers or omissions: potential administrative factors, insurer pricing power, and the timing of filings relative to regulatory decisions. Reports focusing on federal budget impacts emphasized the cost of expanded subsidies to the government and suggested those fiscal pressures could have influenced debate over policy continuations, framing insurer claims in the context of broader fiscal scrutiny ^{[8] [9]}. Other pieces noted regulators approved many of the filings, indicating regulatory validation, while also pointing out that filings are forward-looking estimates that can overstate or understate actual outcomes depending on enrollment and utilization trends ^{[3] [6]}.

4. The policy stakes: who benefits and who pays if subsidies change

Analyses converge on a clear policy trade-off: enhanced PTCs lowered premiums and boosted enrollment, with over 24 million enrollees in the marketplace largely receiving assistance, but sustaining those subsidies produces higher federal outlays and creates a potential cliff if they expire—an outcome insurers said fed uncertainty into pricing decisions ^{[4] [7]}. Coverage advocates emphasize that letting enhanced PTCs lapse would transfer cost burdens back to consumers and could leave millions facing steep premium shocks; fiscal critics emphasize program cost and risks of improper payments, which shaped political pressure around the subsidies ^{[9] [8]}. This framing shows insurer filings sat at the intersection of actuarial forecasting and partisan policy choices, making the filings both technical rate-setting and political signals ^{[1] [5]}.

5. What to watch next: regulators, enrollment, and actual claim experience

The key facts that will confirm or undercut insurer justifications are ^[10] final regulatory approvals and any required rate changes, ^[11] 2026 enrollment and subsidy policy decisions, and ^[12] observed 2026 claim experience versus the actuarial assumptions used in filings. Reporting from late 2025 documents insurer claims and projected increases, but real-world outcomes—paid claims, utilization, and whether enhanced PTCs persist—will determine whether filings proved prescient or overly conservative ^{[2] [1]}. Policymakers and consumer advocates will continue to frame the narrative: some will stress protecting consumers from premium shocks, while others will emphasize fiscal sustainability and program integrity, revealing the political stakes underlying technical rate filings ^{[8] [7]}.