Actuarially grounded resources in the guide explore key policy and market factors that shape enrollment, risk pool composition, and premium trends—helping policymakers, industry, and regulators see how the pieces fit together.
By Ted Gotsch
Health care policy in the United States has been in flux for a while. To help connect some of the actuarial dots for policymakers, industry, and regulators, the Academy’s Health Practice Council (HPC) rolled out a suite of publications exploring key policy and market factors that shape enrollment, risk pool composition, and premium trends.
The HPC unveiled Health Insurance Market Dynamics: A Resource Guide just days after President Trump signed the “One Big Beautiful Bill Act” into law—legislation that will substantially reshape the delivery of health care services nationwide. The guide offers a series of actuarially grounded publications examining the individual and small group markets under the Affordable Care Act (ACA), large-group employer-sponsored plans, and state Medicaid programs. Collectively, the issue briefs and infographics highlight how various aspects of these three health insurance markets influence one another.
While each resource stands alone, as a package they provide a broader picture of how policy changes and market forces may interact, revealing connections among the three markets and the challenge when looking to find some balance. These dynamics are central to ongoing discussions around access, costs, and coverage eligibility, especially at a time when all those things shift due to political and economic factors.
These concerns framed the discussion at an Academy webinar in August on health insurance premiums and market stability for the coming year. “It is important to understand what supports a stable market,” HPC Vice President Annette James said. “When the risk pool becomes skewed toward its higher cost enrollees, premiums rise.” That can lead to a segmented market, she noted.
Joining James on the webinar were Jason Karcher and Tammy Tomczyk, chair and vice chair of the Individual and Small Group Markets Committee, along with senior health fellow Cori Uccello. In their presentations, they noted that market stability, which is essential to affordability, competition, and consumer access in the individual market, is being threatened by policy changes such as the expiration of enhanced premium tax credits and stricter eligibility verification rules. Echoing the findings of the premium cost drivers issue brief, the speakers noted that 2026 premium increases are likely, driven by rising medical costs, increased drug spending, and worsening risk pools.
Karcher said changes to enhanced premium tax credits “are expected to reduce the number of people with subsidized coverage.” States “are going to have to pitch in more,” he said.
All of this underscores the role of cross-market interconnectedness in shaping the health care marketplace. Policy decisions regarding Medicaid and employer coverage, for example, can ripple through the individual and small group markets, ultimately leading to higher prices and more uncertainty.
Understanding how each market functions in its own space, as well as in the broader health market space, is particularly important for policymakers as they consider new legislation or regulations. What may be considered to be a small, insignificant change in one line of an 800-page law could impact coverage options and negatively impact affordability for thousands of individuals.
Inside the Resource Guide
Among the publications featured in the resource guide is an infographic[1] on health insurance premium cost drivers. It highlights the expiration of the enhanced premium tax credits at the end of this year; the new Marketplace Integrity and Affordability Rule; increased uncertainty caused by submitting individual market rate filings before key federal rules and legislation was finalized; increased spending on drugs; state legislative and regulatory factors; and a decrease in the small group market.
Also included is a policy discussion brief examining market stability through the lens of the individual health insurance market.[2] The brief lists the key components of a stable market, current policies that support market stability, and policy changes that could either improve or threaten market stability. Market stability is essential to ensuring affordable coverage, robust insurer competition, and meaningful consumer choice in the individual market. Any policy changes should be carefully evaluated for their potential impact on the underlying dynamics that support a stable and functional insurance market.
Considering premium drivers and market stability, it’s easy to see how interconnected these programs are. A short paper on the interconnectedness of health coverage sources for those under age 65[3] describes the complex tapestry of the U.S. health care system due to its public-private construction. From a public policy perspective, recognizing this delicate balancing act should be a priority for policymakers as they develop, draft, and consider changes or modifications to the system through legislation or regulation. Understanding the broader implications of policy decisions across the coverage spectrum can support more effective, coordinated policymaking and help reduce unintended consequences. By considering how changes in one market affect others, policymakers can help build a more stable, accessible, and affordable health insurance system.
The resource guide also includes a Medicaid issue brief that explores possible funding solutions for the program, given its ever-increasing price tag, including the pros and cons of setting a fixed rate per enrollee. The implications of per capita caps on federal and state payments and related budgetary pressures depend on how the per capita caps are designed, how the initial cap is set, and how it changes over time.
Taken together, this resource guide provides critical insights into a system in which all Americans participate, whether it is a public program like Medicaid or commercial insurance via the employer or the ACA. The more policymakers, industry, and actuaries understand the delicate balance of this complicated and interwoven ecosystem, the better positioned we’ll be to develop and evaluate potential solutions to the policy questions that continue to challenge us.
Ted Gotsch is policy content and publications manager at the Academy.
[1] “Drivers of 2026 Health Insurance Premium Changes: Effects on Premiums”; American Academy of Actuaries Individual and Small Group Market Committee; July 2025.
[2] “Strategies to Achieve Market Stability in the Individual Health Insurance Market”; American Academy of Actuaries Individual and Small Group Market Committee; July 2025.
[3] “The Interconnectedness of Health Coverage Sources for the Under-65 Population”; American Academy of Actuaries Individual and Small Group Market Committee; July 2025.