Insurance premiums have doubled since 2013, but policies are more generous

An HHS report released late Tuesday paints a grim picture of the rising health insurance premiums under the Affordable Care Act. But health policy experts explained that while premiums may have gone up since the ACA was implemented, consumers are also getting more bang for their buck.

The report, which is the first ACA report out of HHS' Office of the Assistant Secretary for Planning and Evaluation published under the direction of the Trump administration, concluded that individual health insurance premiums grew 105% on average between 2013—before the ACA exchange went into effect—and 2017.

For the 39 states that use HealthCare.gov, average monthly premiums rose from an average of $232 in 2013 to $476 in 2017, the report said. The report did not account for the financial assistance available to low-income marketplace enrollees that lowers premiums and out-of-pocket costs.

The White House is in the midst of its push to repeal the ACA and called the report "the study that the Obama Administration never wanted you to see."

The House Energy and Commerce Committee in its own announcement said the HHS report provides "a more complete picture of just how catastrophic Obamacare has been for patients on the exchanges." The House passed its repeal-and-replace bill, the American Health Care Act, earlier this month. The ball is now in the Senate's court.

There is no doubt that premiums for ACA marketplace coverage have risen significantly in the past few years. In 2017, premiums for the benchmark exchange plans rose 25% on average, before considering financial assistance. And in the five states and District of Columbia that have published them, insurers are asking for hefty 2018 rate requests, some more than 50% on average. Those rate requests are not final and must undergo review.

But health policy experts say HHS' latest report compares apples to oranges because it juxtaposes two very different products. In many states, health insurance policies are completely different in 2017 than they were in 2013. That's because the value of insurance policies has increased thanks to key ACA protections.

"By neglecting to consider the differences in value between 2013 and 2017, the HHS report misses the big picture," said Emily Gee, a health economist at the Center for American Progress and a former analyst for HHS' Office of the Assistant Secretary for Planning and Evaluation.

Before the ACA was implemented, insurers could deny coverage to people with pre-existing conditions. They could charge sicker people higher premiums. Coverage also often failed to include benefits now mandated under the ACA, such as coverage for maternity care and substance-abuse disorders.

"Premiums in 2013 were artificially low because insurance companies rejected people with pre-existing conditions or offered them premiums so high they didn't enroll," Gee said.

The ACA required insurers to cover all people regardless of pre-existing conditions. It eliminated medical underwriting, which prohibited insurers from charging sick enrollees more than healthy ones. It got rid of annual and lifetime benefit limits. It capped consumers' out-of-pocket costs.

These ACA protections boosted premiums, because previously uninsured sick people could enroll in comprehensive coverage in the individual insurance market for the first time.

"It's not surprising that the product costs less (in 2013) than what an ACA compliant-plan costs now," said Tim Jost, a health reform expert and emeritus law professor at Washington and Lee University.

The HHS report noted that ACA regulations increased insurance coverage requirements in most states, which increased the price of ACA-compliant plans compared to pre-ACA plans.

Jost said the biggest driver of premium increases is the provision that prohibits insurers from charging sick people higher premiums than healthier people. In states that required insurers to charge the same price for insurance no matter what the policyholder's health status pre-ACA, such as New Jersey, premium increases between 2013 and 2017 were minimal.

The HHS report noted that premiums in New Jersey rose just 12% between 2013 and 2017—the smallest increase in the 39 states analyzed.

The HHS report did not show the actual cost of enrollees' coverage. Most policyholders aren't paying the whopping $476 average monthly premium mentioned in the report, said Cynthia Cox, an associate director at the Kaiser Family Foundation. The 84% of exchange enrollees that received a premium tax credit in 2017 paid an average monthly premium of $106.