Just as most healthcare prognosticators guessed, the rate increases for health plans sold on the federal exchange next year are generally moderate. But it really all depends on the locations of the insurers and the consumers.
What most surprised the experts was the sheer volume of data the CMS released, described by the agency as an attempt to give the public a comprehensive view of the marketplace. The trove outlines premiums, cost-sharing requirements, provider networks and other details of every plan that will be sold next year for more than 100,000 individual and small-group health plans in 34 states where HHS is managing enrollment through HealthCare.gov.
“CMS just dropped the mother lode of data,” said Katherine Hempstead, a director at the Robert Wood Johnson Foundation who oversees health insurance research. “It's like the rumors are totally true. Transparency has increased a lot.”
An early analysis of the individual rates by consulting firm Avalere Health found that the average premium in the lowest-cost silver plan for a 50-year-old nonsmoker will be $381 next year, an increase of 4%. The average premium in the lowest-cost bronze plan for the same type of person will be $307, or about 3% higher than in 2014.
One of the most important measures of the exchanges is the second lowest-cost silver plan, the benchmark the government uses to determine premium subsidies. Avalere found the average premium for the second-cheapest silver plan for a nonsmoking 50-year-old in 2015 will rise 3% next year to $395 before factoring in the premium subsidy. However, that figure varies greatly. In Mississippi, the benchmark premium will drop 19%, and in Alaska, it will jump 28%.
Premium subsidies are issued to consumers in the form of tax credits to help offset the cost of insurance. About 85% of enrollees received financial assistance with their exchange plans last year, but those subsidies will soon face the judgment of the U.S. Supreme Court, which agreed to take a case determining the legality of the subsidies in states that are relying on HHS to run their marketplace.
Although premium increases are modest overall, they vary greatly by where consumers live. For example, the average premium for a 40-year-old nonsmoker before tax credits ranges from a low of $121.95, which is a catastrophic-level plan in Arizona, to a high of $791.34, a platinum plan in Illinois.
Still, the numbers should quiet fears that sharp increases in the cost of plans sold in the marketplaces would undermine the Affordable Care Act's coverage expansion. The CMS said the number of health insurers participating in an Affordable Care Act exchange is 25% higher than last year. In addition, more than 90% of consumers will be able to pick a plan from at least three competing insurers, up from 75% last year.
“This is confirmation that the health insurance industry sees the new ACA exchanges as a business opportunity and business worth pursuing,” said Ceci Connolly, managing director at PricewaterhouseCoopers' Health Research Institute.
The health plan information release is similar to other measures HHS and the CMS have taken to give providers, insurers and consumers more data upfront. For instance, the government most recently listed a partial data set of payments between providers and medical-device and pharmaceutical companies, called the Open Payments database.
Like those other data dumps, most see the health plan information as a resource to create tools to help consumers make sense of their coverage options. “The average consumer is still going to be focused more on doing that window shopping on HealthCare.gov,” Connolly said.