Nearly 70 percent of consumers who bought subsidized health insurance on the federal exchange for 2014 paid $100 or less in monthly premiums, a federal report out Wednesday shows.
That means the average monthly premium went from $346 before tax credits to $82 across all plan types, according to the Department of Health and Human Services report.
Those who received premium subsidies and chose silver plans, the most popular type on HealthCare.gov, paid an average of $69 per month. Nearly 90 percent of those buying on the federal site received some subsidy. These statistics apply only to people in the 36 states that used the federal exchange.
The report comes as new state filings for the 2015 plan year show more insurance companies are moving onto health-care exchanges in some competition-deprived states and requesting rate increases that are largely in line with pre-Obamacare years.
Though HHS noted 96 percent of people in states on HealthCare.gov had a choice of two to 11 insurers, that wide variance left those in several states struggling to find plans that fit their budgets and included their doctors and hospitals.
Some blame the absence of many insurers for higher rates than many people expected under the Affordable Care Act, especially middle-class consumers who weren’t eligible for subsidies.
That’s likely to change for the 2015 plan year, a new report out Wednesday by health-care advisory company Avalere Health shows.
If approved by state-insurance commissioners, the average monthly silver premiums would rise by 8 percent in nine states reviewed, jumping from $324 in 2014 to $350 in 2015. The average monthly silver premiums would increase by a range of 2.5 percent in Rhode Island to 16 percent in Indiana. Oregon was the only state studied where average premiums would drop next year, falling 1.4 percent or $3 per month.
“Now that (insurers) have more information, there’s going to be more accurate pricing, which will help” improve rates for those who do and don’t receive federal subsidies, said Bryce Williams, manager director of benefits consulting firm Towers Watson, which operates the largest private exchange for retirees.
But Avalere Vice President Matt Eyles says that given the timing of plan filings for 2015, issuers didn’t have much 2014 data on which to base their pricing data. Besides, the entry of new insurers in some states is leading to even wider variation in premiums, he says.
Rate proposals range from cuts of 10 percent or more to double-digit increases for some companies. The overall increase is expected to settle at 10 percent to 15 percent, says John Holahan, a fellow specializing in health care at the Urban Institute. From 2008 to 2010, premiums grew by 10 percent or more per year, according to the health-care research and policy foundation Commonwealth Fund.
That shows the law is neither leading to the cost savings some hoped for nor the steep increases critics charged it would.
Most states approve lower increases than insurance companies request. For example, the insurer All Savers wanted to charge $696 for a silver, but Maryland slashed that by more than $200 to $470.
CareFirst in Maryland is among those proposing rate increases and has asked for a jump of 23 percent to 30 percent.
The wide variance in proposed rate changes stems from all the uncertainty associated with who would sign up for insurance and how old and unhealthy they might be.
“Insurers are seeing this as a growth opportunity and a profitable market,” says Larry Levitt, senior vice president at the nonprofit health organization Kaiser Family Foundation.
It should continue to get more competitive, said Ken Fasola, CEO of the independent insurance shopping website HealthMarkets: “There is going to be a lot of movement in the first couple years as insurers get comfortable with the markets.”
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