Report: Double-digit ACA premium hike predictions overestimated

Predictions of widespread double-digit premium rate increases for consumers purchasing health insurance through the state marketplaces were overestimated, according to a report from the nonprofit Urban Institute.

When they looked at 20 states and the District of Columbia, researchers found that the lowest-cost silver plans saw only a 4.3 percent average increase in premiums from 2015 to 2016.

While some of the earlier premium predictions were based on proposed rates, researchers in this case analyzed final approved rates. Here's some key findings of the report, which was funded by the Robert Wood Johnson Foundation:

  • In six states and the District of Columbia, the average premium for the lowest-cost silver plan decreased.
  • There was a wide variance among the states and within a state's regions. The average premium of the lowest-cost silver plan increased by less than 5 percent in five states, increased between 5 and 10 percent in five states, and increased by more than 10 percent in just four states.
  • Regions with lower 2015 premiums tended to see larger cost increases in 2016 than states that began with higher 2015 baseline premiums.

Based on that finding, the authors suggest that many insurers may have set low initial prices to attract consumers,and then raised premiums for 2016. The report forecasts that it will take a few more years for insurance risk pools and premiums to stabilize.     

"Premiums are the most important factor for the exchange customer," Kathy Hempstead, who directs coverage issues at the Robert Wood Johnson Foundation, said in an announcement of the study. "While rates have not increased significantly in all markets, plans have changed in other ways, so consumers should shop carefully."

A recent analysis found premium increases are primarily driven by inpatient and outpatient hospital spending and said premiums for 2016 will increase an average of $24.26 per month. The Centers for Medicare & Medicaid Services announced last month that premium rates for "benchmark" health plans--the second-lowest-cost silver plan--on the exchanges will rise an average of 7.5 percent next year.

Another analysis, from the McKinsey Center for U.S. Health System Reform, foudn that premiums for plans on the exchanges rose 6 percent between 2015 and 2015.

To learn more:
- read the report

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