HHS: Exchange plan premium rate hikes weren't as high as feared

As health insurers start to file their premium rate proposals for qualified health plans, a new report from the Obama administration points out that Affordable Care Act plan premiums rose an average of only 8 percent last year despite predictions of widespread double-digit increases.

That disparity is because insurers' initial filings are "not able to predict what premiums marketplace consumers will actually pay next year because they do not account for rate review, consumer shopping behavior or tax credits," according to the report from the Department of Health and Human Services' Assistant Secretary for Planning and Evaluation. 

The Centers for Medicare & Medicaid Services predicted in October that ACA plan premiums will increase about 7.5 percent in 2016.

Insurers base their rate predictions on the assumption that customers do not shop around and that consumers always stick with the same plan, the report says. Federal health officials have urged consumers to review their plan options in order to avoid premium increases, and the effort appears to have paid off: Two-thirds of new Healthcare.gov consumers selected a new plan in 2016, including all new consumers and 43 percent of returning consumers, the report says.

Additionally, the report says that for 85 percent of Healthcare.gov consumers who were eligible for tax credits, premiums only increased byan average of 4 percent.

To learn more:
- read the report (.pdf)