Analysis indicates some consumers could get better deal outside of exchanges

Some consumers may find lower premiums next year buying health coverage outside of the state insurance exchanges, according to a survey released Thursday by HealthPocket, a Sunnyvale, Calif., firm that helps people make informed health plan choices.

HealthPocket looked at more than 1,600 health plans currently available in 10 states (California, Colorado, Connecticut, Georgia, Maryland, North Carolina, Oregon, South Carolina, San Diego and Washington) where some major commercial insurers have said they will not participate in the state exchanges. It calculated the average monthly premium, based on 2013 rates, for a 35-year-old male nonsmoker buying a plan from insurers not participating in those states' exchanges in 2014. When compared with the 2013 premiums of insurers that are participating, HealthPocket found that on average the non-exchange insurers' premiums were nearly 25% less expensive.

HealthPocket's analysis noted that under the Patient Protection and Affordable Care Act, consumers with incomes under 400% of the federal poverty level can receive federal premium subsidies only if they buy coverage through the state exchanges. The subsidies will significantly reduce out-of-pocket premium costs for Americans with low to moderate incomes. So they likely will get a better deal buying through the state exchanges.

While HealthPocket did not consider the approved health plan premiums for 2014, Kevin Coleman, the company' head of research and data, said that if the same pattern holds true for differences between insurers next year, it makes sense for consumers—especially those who earn too much to qualify for a subsidy—to consider buying coverage outside the exchanges.

Health plans outside the exchanges will be subject to the same ACA rules regarding essential benefits, prohibition against medical underwriting, and limiting rate differences based on age to a 3-1 spread.

But some experts worry that insurers may choose to sell coverage only outside the exchanges to attract younger, healthier, more affluent subscribers with lower health costs. That could skew the exchange pool toward older, sicker people, driving up premium costs within the exchanges and making non-exchange coverage more attractive.

Coleman said if consumers who aren't eligible for a subsidy find better deals outside the exchanges, the exchanges will disproportionately attract lower-income people who qualify for a subsidy and may have greater healthcare needs.

Coleman also noted that even though insurers under the ACA must consider on-exchange and off-exchange populations part of a single risk pool, some have formed separate entities to operate on the exchanges, citing Regence Blue Cross and Blue Shield's creation of BridgeSpan to participate only in the Oregon exchange.

“This strategy of an exchange-specific insurance company may allow a parent company to explore the business potential of the exchange environment without risking adverse risk pool effects for its central insurance brand,” he said.

HealthPocket noted that consumers need to consider coverage quality as well as price. It said many of the insurers avoiding the exchanges are for-profit companies, while not-for-profit insurers typically score higher on quality rankings.

Follow Jonathan Block on Twitter: @MHjblock