Health insurance premiums for health plans participating in the Affordable Care Act (ACA) exchanges over its first year have remained fairly steady, according to a Kaiser analysis of 2015 premium changes.
The newly released survey of health plans across 15 cities is one of the "first tangible tests of how well the ACA is working," wrote study authors Cynthia Cox, Larry Levitt, Gary Claxton, Rosa Ma and Robin Duddy-Tenbrunsel.
Premiums for some plans actually dipped, the study found. For example, the premium for the second-lowest-cost silver plan in the marketplaces decreased by an average of -0.8 percent, before taking any income-related tax credits into account.
Premium changes for 2015 are "quite modest," when looking at the low-cost insurers in the marketplaces, "which is where enrollment is concentrated," Cox and her colleagues added.
The study also looked at the major factors that play on premium variations across the country, which included:
Accuracy in forecasting the health needs of enrollees. In 2014, insurers had very little to go on as they set premiums. They knew about the demographics of their enrollees, but they had scant information on the previous patterns of healthcare use by beneficiaries, particularly those who had never had insurance before.
The composition of the risk pool. Insurers assumed enrollees would be disproportionately sicker in 2014, but that impression proved correct for only some payers. Surveyed insurers also varied on how they expected the risk pool to change for 2015. Some anticipate that the second-year enrollees will be healthier on average than those who enrolled in the first year.
Competitive dynamics. Surveyed insurers said they base premiums on what their competitors charge and how market share is distributed. They also make strategic adjustments to how they price based on other carriers.
As more insurers release their 2015 premium requests, some hope to gain a larger share of their market by dropping their rates. Kaiser Permanente, for example, sold some of the most expensive plans on the health insurance exchange in California and came in fourth among all exchange insurers. Its poor performance may have driven the company to lower its rates by 1.4 percent.
Despite what some media reports have to say, health insurance premiums won't "skyrocket" next year, because some states use regulatory mojo to roll back outrageous requests," according to an article by ConsumerReports, as previously reported in FierceHealthPayer.
For more information:
- check out the survey