Early Gov Data on 2015 Obamacare Premiums Shows Encouraging Trends But Data Incomplete

11-18-14

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Early Gov Data on 2015 Obamacare Premiums Shows Encouraging Trends But Data Incomplete

Increase in Number of Insurers Improved Competition and Contributed to Change in Average Market Premiums

Increase in Number of Insurers Improved Competition and Contributed to Change in Average Market Premiums

On Friday, November 14th 2014 the government released its ‘landscape’ data on 2015 Affordable Care Act health plans offered through 38 state exchanges. When premiums contained in the landscape data were averaged across metal tier for the available states and compared to landscape data provided by the government 2014 health plans, the average bronze premium decreased, the average platinum premium increased, and the average premiums for silver and gold plans remained the same.

The trend in average premiums portrayed in the landscape data is encouraging news for the government given that the first year of the Affordable Care Act brought dramatic increases in the average insurance premium nationwide.1 Subsequent analysis using data from all states as well as off-exchange plans will give a more accurate picture of how the average premiums in the 2015 Affordable Care Act market have changed from 2014.

One of the factors that may have positively influenced the average premiums in the 2015 market is increased competition. The government estimates that the number of exchange insurers is 25% higher in 2015 as compared to 2014.2 In the 44 states for which the government had data for this estimate, 77 new insurance issuers were documented for 2015.3

Another factor affecting the average premium estimates for 2015 is that government landscape data does not include premiums from every state. 12 states plus the District of Columbia are not included within the landscape data released by the government. The list of missing states is below and includes California which historically has been among the largest of state markets for individually purchased insurance.

  • CA
  • CO
  • CT
  • DC
  • ID
  • KY
  • MA
  • MD
  • MN
  • NY
  • RI
  • VT
  • WA

The 2014 landscape files released by the government had even fewer states (34) than the 2015 edition of the data.4

A final consideration for observed changes in average premiums is that, when setting rates for 2014, insurers did not have experience with the type of enrollee pools that the Affordable Care Act would create. In most states, people with expensive medical conditions in the pre-reform market could be declined for individually purchased health insurance. With the implementation of the Affordable Care Act, medical underwriting could no longer be used to determine applicant approval or premium amount. Consequently, 2014 premiums involved a degree of hypothesis regarding who would enroll and how they would use healthcare while 2015 rates had a portion 2014 healthcare usage data to inform rate setting.

Comparison By Metal Tier

Below is the comparison of average premiums by metal tier for all plans included in the 2015 and 20145 Landscape files. Note that averages assume a nonsmoking individual insurance applicant and does not include any government subsidies that might be applied to the premium amount.

Bronze Plans Premium Changes

2014 Avg Premium2015 Avg Premium% Difference
Age 30$262.69$231.78-12% decrease
Age 40$295.51$260.74-12% decrease
Age 50$413.16$364.55-12% decrease
Age 60$627.10$553.33-12% decrease

All premium averages assume a nonsmoking individual

Silver Plans Premium Changes

2014 Avg Premium2015 Avg Premium% Difference
Age 30$284.02$283.160%
Age 40$319.42$318.480%
Age 50$446.66$445.330%
Age 60$677.69$675.760%

All premium averages assume a nonsmoking individual

Gold Plans Premium Changes

2014 Avg Premium2015 Avg Premium% Difference
Age 30$335.71$334.560%
Age 40$377.63$376.280%
Age 50$528.00$526.150%
Age 60$801.33$798.370%

All premium averages assume a nonsmoking individual

Platinum Plans Premium Changes

2014 Avg Premium2015 Avg Premium% Difference
Age 30$344.85$415.1620% increase
Age 40$388.29$467.4520% increase
Age 50$542.64$653.2720% increase
Age 60$824.58$992.6920% increase

All premium averages assume a nonsmoking individual

CONCLUSION

The 2015 landscape files from the government contain encouraging trends regarding the average premiums across all Affordable Care Act plans. HealthPocket will release in the coming weeks a more extensive analysis that compares 2015 premiums to 2014 using data from all states as well as off-exchange health plan data. Once this subsequent analysis is performed, HealthPocket will be able to see whether new insurers and other factors have been able to deliver the changes in average premiums portrayed in the landscape data.

METHODOLOGY

Out-of-pocket costs for 2015 Affordable Care Act health plans was based on multiple Qualified Health Plan (QHP) Landscape files for government marketplaces (2015_QHP_Landscape_Individual_Market_Medical, 2015_QHP_Landscape_NM_Individual_Market_Medical, 2015_QHP_Landscape_NV_Individual_Market_Medical, and 2015_QHP_Landscape_OR_Individual_Market_Medical). Bronze, silver, gold, and platinum health plan data was used, covering multiple rating regions within the states included in the landscape file. Catastrophic plans, while Affordable Care Act health plans, were not included within the scope of this study due to their special eligibility requirements. Premiums do not include any applicable government subsidies. The QHP Landscape files were downloaded by HealthPocket from the Centers for Medicare & Medicaid Services November 14, 2014.

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.

Industry standard rounding methods were utilized.

No weighting by health plan enrollment was performed.

AUTHOR

This analysis was written by Kev Coleman, Head of Research & Data at HealthPocket. Correspondence regarding this study can be directed to Mr. Coleman at kevin.coleman@healthpocket.com.

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1 The dramatic increases in average premiums in 2014 vs. 2013 were based on a more comprehensive set of data that included all states. Kev Coleman and Jesse Geneson. “Without Subsidies Women & Men, Old & Young Average Higher Monthly Premiums with Obamacare.” October 29, 2014. HealthPocket. http://www.healthpocket.com/healthcare-research/infostat/obamacare-2014-premiums-higher-than-pre-reform-market
2 “New Report: Health Insurance Marketplace will have 25 percent more issuers in 2015.” Department of Health & Human Services. September 23, 2014. http://www.hhs.gov/news/press/2014pres/09/20140923a.html?utm_campaign=09/23/2014%20-%20news%20release%20-%20new%20issuers&utm_medium=social&utm_source=twitter%20-%20hhs%20gov&utm_content=text%20-%20linked%20tweet. Last accessed November 14, 2014.
3 Ibid.
4 Jesse Geneson and Kev Coleman. “Healthcare Usage & Choosing the Least Expensive Affordable Care Act Plan.” December 19, 2013. HealthPocket. http://www.healthpocket.com/healthcare-research/infostat/medical-use-age-obamacare-plan-choice
5 2014 QHP Landscape data was collected and reported in December 2013. The 2014 Landscape data had four fewer states in its dataset. “Healthcare Usage & Choosing the Least Expensive Affordable Care Act Plan.”

 

 

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