2016 Affordable Care Act Market Brings Higher Average Premiums for Unsubsidized

11-02-15

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InfoStat | 11-02-15

2016 Affordable Care Act Market Brings Higher Average Premiums for Unsubsidized

Average deductibles increase or decrease depending on metal tier

The third enrollment season for the Affordable Care Act brings with it less confusion among consumers and greater technical stability among government exchanges. What has not changed from the first enrollment season is a high degree of scrutiny over premiums and deductibles from consumers as well as the press. A pre-enrollment season of insurance rate filings in 45 states found the average rate increase requested by insurers was 12%.1 With the recent government release of data on next year’s Affordable Care Act (ACA) plans, HealthPocket examined the average premiums, deductibles, and out-of-pocket cost caps for 2016.

HealthPocket averages were for the available market options across geographies prior to subsidization. While proposed increases in 2016 rate filings for Affordable Care Act plans attracted media attention, it only illuminated a partial story. Alongside existing plans that were changing their rates from 2015 to 2016, there were also market entrants and exits for the 2016 plan year that affected the average available premiums and deductibles in the privately purchased health insurance market. With respect to the 2016 ACA market, CNBC reported that there will be up to 12% fewer health plans offered on Healthcare.gov in 2016.2 In comparison, 2015 had enjoyed an increase of 25% with respect to the number of insurers offering Affordable Care Act plans in 2015 versus 2014.3

Averages By Metal Tier

Below is the comparison of average premiums by metal tier for all 2016 Affordable Care Act health plan records made available by the federal government on October 23, 2015. Note that the premium averages assume a nonsmoking individual insurance applicant and does not include any government subsidies that might be applied to the premium amount based on income eligibility.

Comparative 2015 average premiums are based on the same type of government landscape data files that were used for the 2016 average premiums, with the 2015 plan data made available in November 2014.4 Since market options were evaluated in this study rather than consumer behavior, no weighting by enrollment was performed on health plans.

Bronze Plans

Bronze plans are the entry-level plans within the Affordable Care Act and typically have the lowest premiums and the highest out-of-pocket costs for healthcare use. These entry-level plans are more popular with the unsubsidized consumer as compared to the subsidized consumer.

Average Premiums in 2016

Individual Age Profile

2016 Average Bronze Plan Premium

2015 Average Bronze Plan Premium

Difference

30 year-old

$257.68

$231.78

11%

40 year-old

$289.88

$260.74

11%

50 year-old

$405.28

$364.55

11%

60 year-old

$615.15

$553.33

11%

Average 2016 Out-of-Pocket Costs

Out-of-Pocket Cost Category

2016 Avg. for Individuals

2016 Avg. for Families

Deductible

$5,731

$11,601

Maximum Out-of-Pocket Costs

$6,639

$13,292

With respect to plan out-of-pocket costs on bronze plans, 2016 brings an 11% increase in the average deductible amount for individuals and a 10% increase in the average deductible amount for families. The average limit regarding the maximum amount of out-of-pocket costs for covered medical services delivered in-network also increased for bronzes plans in 2016.

Silver Plans

Silver Plans are the most popular purchased health plan type on exchanges. The government has promoted widely that “7 in 10 returning Marketplace consumers will be able to buy a plan for $75 or less in monthly premiums after tax credits in 2016.”5 Additionally, the government promoted that the second lowest cost silver plans offered on Healthcare.gov, upon which subsidies are based, will increase in unsubsidized premiums at a 7.5% average rate.6

Average Premiums in 2016

Individual Age Profile

2016 Average Silver Plan Premium

2015 Average Silver Plan Premium

Difference

30 year-old

$312.00

$283.16

10%

40 year-old

$351.02

$318.48

10%

50 year-old

$490.75

$445.33

10%

60 year-old

$744.99

$675.76

10%

Average 2016 Out-of-Pocket Costs

Out-of-Pocket Cost Category

2016 Avg. for Individuals

2016 Avg. for Families

Deductible

$3,117

$6,480

Maximum Out-of-Pocket Costs

$6,110

$12,270

The rate of increase in average deductible for silver plans was more modest than bronze plans. The average 2016 deductible for an individual is 6% higher than what was observed for 2015 while the average family deductible rose by 8% in 2016.

Like bronze plans, the average maximum amount for out-of-pocket costs on covered medical services delivered in-network rises for silver plans in 2016.

Gold Plans

Gold plans, along with platinum plans, are often considered ‘higher-end’ plans within the Affordable Care Act market due to their costlier average premiums and more generous out-of-pocket cost protections.

Average Premiums in 2016

Individual Age Profile

2016 Average Gold Plan Premium

2015 Average Gold Plan Premium

Difference

30 year-old

$380.98

$334.56

14%

40 year-old

$428.51

$376.28

14%

50 year-old

$599.16

$526.15

14%

60 year-old

$909.22

$798.37

14%

Average 2016 Out-of-Pocket Costs

Out-of-Pocket Cost Category

2016 Avg. for Individuals

2016 Avg. for Families

Deductible

$1,165

$2,535

Maximum Out-of-Pocket Costs

$4,708

$9,634

Platinum Plans

Platinum plans provide the greatest cost coverage of medical expenses by the health plan for its enrollees. As such, their out-of-pocket costs are typically the lowest and their premiums are typically the highest as compared to the other Affordable Care Act metal tiers.

Average Premiums in 2016

Individual Age Profile

2016 Average Platinum Plan Premium

2015 Average Platinum Plan Premium

Difference

30 year-old

$482.87

$415.16

16%

40 year-old

$543.68

$467.45

16%

50 year-old

$759.81

$653.27

16%

60 year-old

$1,154.51

$992.69

16%

Average 2016 Out-of-Pocket Costs

Out-of-Pocket Cost Category

2016 Avg. for Individuals

2016 Avg. for Families

Deductible

$233

$468

Maximum Out-of-Pocket Costs

$2,403

$4,806

Reductions in the average deductible were even more pronounced among platinum plans than among gold plans. The average deductible for platinum plans in 2016 are 4% less for individuals and families than the averages observed for 2015. As was the case with gold plans, the decrease in average deductibles came with an increase in the average limit on maximum out-of-pocket costs for covered medical services delivered in-network.

Conclusion

When assessing options across the Affordable Care Act market, rate increases on existing plans as well in changes in the number of plans has resulted in double-digit increases in the average cost of premiums available within the market as represented in the government data. For the unsubsidized, this premium increase will likely be met with great concern. For the subsidized, government assistance limiting the cost of premiums to a percentage of earnings will erode the significance of the 2016 premium changes.

Out-of-pocket costs will continue to remain a concern among the subsidized and the unsubsidized given that average deductibles remain high for the most popular ACA plans among the subsidized (silver) and for the most popular ACA plans among the unsubsidized (bronze). However, for the subsidized earning between 100% and 250% of the federal poverty level, the government also provides assistance with out-of-pocket costs.

Methodology

Data records for 2016 Affordable Care Act health insurance plans offered in 37 states were obtained on October 30, 2015. HealthPocket obtained health plan information from the 2016 QHP Landscape Individual Market Medical data files provided by the Department of Health & Human Services. All plans investigated in this study belong to the individual & family insurance market. Medicare, Medicaid, short-term health insurance, and group health insurance plans were not analyzed as part of this study.

Premium averages assume an individual nonsmoking adult for the following age profiles: 30, 40, 50, and 60 year-olds. Deductibles represent medical deductibles. Drug deductibles were not examined in this study.

All analysis assumes the accuracy of the underlying government data. While every effort was made towards a representative collection of plans, HealthPocket makes no representation that every plan within the individual insurance market or in an individual state was included in this study. Percentages are rounded according to standard industry practices. No weighting of premium or deductible averages by health plan enrollment was performed.

Authors

This analysis was written by Kev Coleman, Head of Research & Data at HealthPocket with primary data research performed by Jesse Geneson, Data Scientist at HealthPocket. Correspondence regarding this study can be directed to Mr. Coleman at kevin.coleman@healthpocket.com.
Kev Coleman on Google+
Jesse Geneson on Google+

Sources

1Jesse Geneson and Kev Coleman. “Obamacare Insurers Propose 12% Higher Premiums for 2016” HealthPocket. ( June 11, 2015). https://www.healthpocket.com/healthcare-research/infostat/2016-obamacare-premium-rates. Last accessed October 23, 2015.
2Dan Mangan. “Fewer plans to be on biggest Obamacare exchange for 2016” CNBC. (October 29, 2015). http://www.cnbc.com/2015/10/29/fewer-plans-to-be-on-biggest-obamacare-exchange-in-2016.html Last accessed October 30, 2015.
3Ibid.
4Kev Coleman and Jesse Geneson. “Early Gov Data on 2015 Obamacare Premiums Shows Encouraging Trends But Data Incomplete.” HealthPocket.com. (November , 2014). https://www.healthpocket.com/healthcare-research/infostat/early-trends-2015-obamacare-premiums. Last accessed October 30, 2015.
5“2016 Marketplace Affordability Snapshot.” CMS. (October 26, 2015). https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-10-26-2.html. Last accessed October 30, 2015.
6Ibid.

 

 

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