Report: Average ACA premium rate increase a 'fairly meaningless statistic'

Premiums for the lowest-cost insurance marketplace policies increased an average of 8.3 percent between 2015 and 2016, but the rates of increase vary tremendously across states and even within states, according to research by the Robert Wood Johnson Foundation.

Oklahoma saw the highest increase at 41.8 percent, but rates fell 12.1 percent in Indiana, according to the issue brief.

"We conclude that a national average rate of premium increase is a fairly meaningless statistic since different markets are having very different experiences," the authors concluded. "The focus of attention should be on understanding the wide variability by identifying the characteristics of markets that have experienced high premiums or high growth in premiums and of markets with lower premiums or lower growth in premiums."

After examining 499 rating areas around the country, the researchers found:

  • 29.1 percent of the U.S. population lives in areas where premiums for lowest-cost silver plans fell, and another 19 percent live in areas where increases were no more than 5 percent. Meanwhile, 26.3 percent of the population lives in areas with increases greater than 15 percent.
  • Majorities of the population in 19 states live in areas where the premium either decreased or increased less than 5 percent, but in 16 states majorities lived in areas where premiums increased by more than 15 percent.
  • Increases were minimal or nonexistent in large cities in some states where the rest of the state saw larger silver plan premium increases.

The Obama administration has said that premiums rose an average of 8 percent in 2015, not the double-digit increase that had been predicted. And an early analysis of expected 2017 premiums for Affordable Care Act exchange plans finds proposed rate increases for lowest-cost silver plans ranging from 44 percent in Vermont to 5 percent in Washington, FierceHealthPayer reported this week.

To learn more:
- download the issue brief
- read the announcement