Consumers in certain silver health insurance exchange plans can expect to see a drop in their premium costs for 2015, while some in bronze plans will see increases, a new analysis finds.
“There is variation, but so far, premium increases in year two of the Affordable Care Act are generally modest,” Drew Altman, CEO of the Kaiser Family Foundation, said in a statement. “Double-digit premium increases in this market were not uncommon in the past.”
The Kaiser study analyzed rates published thus far in 15 states and Washington. The analysis found that average premiums for the second-lowest-cost silver plan, which the report explained are the tax credit benchmark for those making from 100% to 400% of the federal poverty level under the Patient Protection and Affordable Care Act, will decrease an average of 0.8% in 2015 from current levels.
“Eligible individuals pay 2% to 9.5% of income on a sliding scale to enroll in the second-lowest-cost silver plan and the federal government covers the difference” between that contribution and the full premium amount, the report explained.
If the trend holds and average premiums for those silver plans decline across the country, the federal government will pay out less than expected in tax-credit subsidies overall for 2015, the report noted. Some people, however, may need to switch plans to ensure they will be in the second-lowest-cost 2015 silver plan.
That's because their 2014 plan's relative cost could change, depending on its premium changes and changes in other plans. If that happens—which would mean their plan would no longer be the second-lowest-cost silver plan for 2015—re-enrollment in the same offering could mean out-of-pocket cost increases for them. People receiving tax credits must pay the difference in premium amount between the plan they choose and the second-lowest-cost silver plan in their area.
The Kaiser study examined published rates in areas that included a major city in its state. In 12 of the 16 ratings areas, at least one of the insurers that had offered one of the two lowest-cost silver plans in 2014 will no longer offer a low-cost silver plan in 2015, according to the Kaiser study.
“Consumers should go into the open enrollment period prepared to shop for the best deal all over again,” Larry Levitt, senior vice president at Kaiser, said in a written statement. “You could end up paying more if your insurer is no longer offering one of the low-cost plans, so you should look carefully at your options.”
Those in bronze-level plans, which are the least expensive option to satisfy the ACA's requirement for coverage, should expect to see their premiums rise an average of 3.3%. Rate changes examined for bronze plans ranged from a 15.7% decrease in Hartford, Conn., to a 13.3% increase in Baltimore.
Of the 5.4 million individuals who selected a plan through the HealthCare.gov facilitated marketplace for 2014, 65% chose a silver plan, 20% chose bronze, 9% chose gold and 5% chose a platinum plan. The remaining 2% chose a catastrophic plan, according to a May HHS report. Gold, platinum and catastrophic plan rates were not analyzed for the Kaiser report.
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