Analysis of Actual Versus Projected Medical Claims Under the First Year of ACA-Mandated Coverage

For the individual market, 2014 was the first year Affordable Care Act medical claims experience data were available to set 2016 rates. Accessing Centers for Medicare and Medicaid Services rate data for 175 state insurers, this study compares projected medical claims with actual medical claims of 2014, as well as the cost and utilization of benefit categories for inpatient, outpatient, professional, and prescription drug spending. Actual costs per member per month (pmpm) were greater than projected in 2014 for inpatient, outpatient, and prescription spending but not for professional care. Overall, actual median medical cost was $443 pmpm, which was significantly higher by $41 than projected cost. Greater utilization of health care was primarily responsible for higher realized medical claims. In terms of the specific benefit categories—inpatient, outpatient, and prescription—actual costs pmpm were significantly higher than projected values. In terms of the drivers of inpatient costs, on an admission basis, higher costs and greater utilization of admissions resulted in higher inpatient costs. For outpatient costs pmpm, higher utilization rather than unit cost per visit drove increased costs. Higher than expected prescription drug costs were driven by both greater utilization and cost per prescription.