Premiums spike on eHealth's private exchange

Premiums for 2014 individual plans sold by eHealth, the nation's largest private insurance exchange, have spiked by more than a third since coverage requirements under the Patient Protection and Affordable Care Act took effect. For family plans, the increase is more than 50%, the Mountain View, Calif., company reports.

The average monthly premium for individual coverage purchased through the company's website was $274. That was up from an average monthly premium of $197 for individual plans that did not have to adhere to new coverage requirements under the ACA. For family coverage, the average monthly premium for 2014 plans sold through eHealth was $663 a month, compared to $426 for non-ACA compliant plans. eHealth is tracking the changes to its customer base on its website.

Brian Mast, eHealth's vice president of communications, said it's not surprising that stricter coverage requirements, including a prohibition on considering pre-existing conditions, have led to higher costs. “All of that causes the premiums to go up because you just have more robust plans,” Mast said.

The private online marketplace sold roughly 170,000 plans for 2014 coverage in the last three months of 2013. Owing to technological problems, eHealth is largely unable to sell plans to individuals who want to access federal subsidies. Under the ACA, subsidies are available for individuals who make up to 400% of the federal poverty threshold.

EHealth's demographics also are skewing significantly younger than on the federal and state exchanges. Roughly 40% of the individuals who signed up for coverage through eHealth were between ages 18 and 34. That compares to roughly a quarter of customers on the state and federal exchanges.

In addition, the average age for eHealth customers so far has been 36 years old. That figure has steadily dropped since the open enrollment window opened on Oct. 1, suggesting that more young people are seeking coverage as the March 31 deadline approaches.

Conversely, eHealth is also seeing a spike in older enrollees. The share of customers between ages 55 and 64 increased from 9% to 21% under the new coverage rules, Mast said. “Some of them were probably locked out of the market in the past,” he said. “Now they can jump in.”

By far the most popular products sold by eHealth have been bronze-level plans, which are designed to cover 60% of healthcare costs. More than 40% of consumers have opted for that level of coverage. That also contrasts with the state and federal exchanges, where more comprehensive silver-level products have been the top choice.

EHealth is also tracking the average monthly premium for plans purchased in most states. The lowest average premium is $220 in Minnesota; the highest is $422 in New York.

EHealth is offering more than 2,300 plans from roughly 100 insurers for sale through its website.

Follow Paul Demko on Twitter: @MHpdemko