Obamacare 2014 Market More Expensive on Average Than Pre-Reform Market
InfoStat | 10-29-14

Without Subsidies Women & Men, Old & Young Average Higher Monthly Premiums with Obamacare

Premium increases should be viewed in light of subsidies as well as elimination of rate-ups and application rejections

Without Subsidies Women & Men, Old & Young Average Higher Monthly Premiums with Obamacare - HealthPocket

Effective 2014, the Affordable Care Act (ACA) required premiums for the same health plan to vary only on an applicant’s age, smoking status, geographic location, and number of people being covered. Applicants could not be rejected due to health status and premiums could not be ‘rated-up’ (i.e. increased) over the standard level for persons sharing the same age, smoking status, and region. One of the questions raised by the ACA is whether women and men as well as the old and young experienced similar changes to their health insurance premiums due to the law.

In order to answer this question, HealthPocket examined the average 2014 ACA premiums for non-smoking men and women ages 23, 30, and 63 and then compared these averages to those in the 2013 pre-reform individual health insurance market. The analysis included both on-exchange and off-exchange individual market plans available in the two largest metropolitan regions in each state. Using government premium data from 2013 and 2014, the premiums for all available health plans were gathered and averaged within a demographic segment (e.g. 30 year-old women).

Average Monthly Premium Costs Before and After the Affordable Care Act

Average monthly premium costs before and after the affordable care actAverage monthly premium costs before and after the affordable care act

Unsubsidized premiums were found to have increased from 2013 to 2014 across all groups examined. Average premium costs for 23-year-old women and men increased 44.9% and 78.2% respectively after the ACA’s implementation. For 63-year-olds the increase was 37.5% for women and only 22.7% for men. Young men had the highest premium increase (78.2%) among the groups examined while senior men had the smallest increase (22.7%) though senior men had the highest baseline premium in 2013 against which their 2014 increases were calculated.

Average premiums in each state varied widely across the United States. New York had the highest average monthly premiums in 2014 for 23- and 30-year-olds ($460) because premium rates in New York are constant between the ages of 21 and 64.1 Vermont, which also had constant premium rates, had the lowest average monthly premium for 63-year-olds ($433).

Hawaii had the lowest average monthly premiums for both 23- and 30-year-olds ($190 and $216 respectively), while Virginia had the highest average monthly premiums for 63-year-olds ($1,101). A contributing factor to Virginia’s premium averages was the availability of special health plans in the state (usually costing over $1,500 a month) that covered gastric bypasses and bariatric surgery.2 Gastric bypasses and bariatric surgery are among the most frequent medical services excluded by Affordable Care Act health plans.3

Average Monthly Premium Costs in 2014 by Age and State

StateAverage monthly
premium age 23
Average monthly
premium age 30
Average monthly
premium age 63
New Hampshire$287$326$847
New Jersey$325$369$959
New Mexico$199$226$588
New York$460$460$460
North Carolina$249$283$736
North Dakota$259$294$764
Rhode Island$219$253$656
South Carolina$266$302$787
South Dakota$296$336$874
West Virginia$307$349$908
United States$258$292$741

Among the fifty states, all but six states used the national default age curve for premium rates. Only Massachusetts, Minnesota, New York, Rhode Island, Utah, and Vermont used their own state-specific age curves. For ages 23, 30, and 63, Minnesota’s premium ratios matched the national default. Rhode Island and Utah both used a 3-to-1 ratio between premiums for ages 21 and 64, but their premium ratios did not match the national default for ages 23, 30, and 63. Massachusetts limited the premium rate for a 64-year-old to be at most twice the premium rate for a 21-year-old, while both New York and Vermont had constant premium rates for 21- to 64-year-olds.

Overall the increase in premium costs from 23 to 63 years old dropped from a national average of 260.0% in 2013 to 187.3% in 2014. In most states, the increases from age 23 to 30 and from age 23 to 63 were lower in 2014 than in 2013. However, in some states the increases were higher. For example, in New Hampshire the increase from age 23 to 30 was 1.1% in 2013 and 13.5% (the national default) in 2014. In 2013 Maine and New Jersey both had less than a 50% increase from age 23 to 63, but in 2014 both states had a 195.2% increase (also the national default).

Average Premium Increases Between Ages

State2013 increase age 23 to 302014 increase age 23 to 30Difference between 2014 and 2013 percentages2013 increase age 23 to 632014 increase age 23 to 63Difference between 2014 and 2013 percentages
New Hampshire1.1%13.5%12.4%145.4%195.2%49.8%
New Jersey8.6%13.5%4.9%46.8%195.2%148.4%
New Mexico18.8%13.5%-5.3%196.7%195.2%-1.5%
New York0.0%0.0%0.0%0.0%0.0%0.0%
North Carolina19.5%13.5%-6.0%259.3%195.2%-64.1%
North Dakota13.9%13.5%-0.4%192.4%195.2%2.8%
Rhode Island30.3%15.9%-14.4%177.5%200.0%22.5%
South Carolina35.2%13.5%-21.7%313.1%195.2%-117.9%
South Dakota18.2%13.5%-4.7%230.9%195.2%-35.7%
West Virginia27.5%13.5%-14.0%302.5%195.2%-107.3%
United States18.8%13.1%-5.7%260.0%187.3%-72.7%


The examination of unsubsidized health insurance premiums is multifaceted and prone to political misuse. The analysis of pre- and post-Obamacare health insurance in the individually purchased health insurance market demonstrates a clear increase of average premiums across age groups and both sexes. While the degree of increase varied by age and sex, the occurrence of an increase did not. However, the degree to which the cost of consumers’ premiums increased is a more complicated matter than suggested by the premium data.

First, the Affordable Care Act has prohibited the rejection of health insurance applicants based on medical history or health status. As HealthPocket’s earlier research demonstrated, in the pre-reform market approximately one-out-of-five health insurance applications were rejected.4 While some portion of the rejected applicants may have applied to a different health plan and obtained coverage, it is likely that many were unable to obtain coverage in the traditional individual insurance market. In such cases, the comparison may be a 2014 premium versus no premium in 2013 when insurance could not be obtained.

A second issue to consider is that the government data on rates in the pre-reform market did not include ‘rate-ups.” Rate-ups are increased premiums offered to applicants after the evaluation of the insurance application. 18% of applicants in the pre-reform market were given a rate-up during the application process.5

Health insurance premium subsidies are a problematic consideration as well. Premium subsidies are only available to those making between 100% and 400% of the Federal Poverty Limit (FPL),6 so their expense reduction is not available to all consumers. Moreover, even within their own prescribed income limits they are not necessarily available because a health plan’s premium may not equal the percentage of income needed to trigger a subsidy. A previous HealthPocket study of eight cities across the U.S. that found that income range for young adults between 18 and 34 was 41% than the income range dictated by the Affordable Care Act.

“On average the maximum income at which young adults could qualify for a premium subsidy was $31,744. This average is $14,216 below the highest subsidy-eligible income stipulated by the Affordable Care Act.”7

Another important consideration in the discussion of subsidized premiums is that the subsidized portion of the premium still must be paid by the government through the money it collects from the nation. In other words, the subsidized costs of health insurance do not disappear but instead change payers.

There are several factors that have contributed to higher premium costs in 2014. With the new prohibition on application rejection due to health, insurance plans in the individual market expanded its number of enrollees with expensive medical conditions. Additionally, the average health plan benefit package also expanded. Under the Affordable Care Act, all health plans on the individual market were required to cover ten categories of Essential Health Benefits, including pediatric oral and vision care, as well as maternity and newborn care. In the 2013 pre-reform market, 92% of plans excluded coverage for children’s dental check-ups, 87% excluded children’s eyeglasses, 67% excluded delivery, and 64% excluded prenatal and postnatal care.8 Less than 2% of pre-reform plans provided all of the essential health benefits.9


2014 premium cost averages included both on- and off-exchange plans that were available to 23, 30, and 63-year-olds in the two largest metropolitan regions in each state, except for Vermont. Vermont premium costs were obtained from the Vermont Health Connect website.10 Plans were limited to the individual and family insurance market. Medicare, Medicaid, and employer-based health plans were not included in this study.

Premium costs were not adjusted with respect to ACA subsidies or weighted for enrollment. Catastrophic plans were not included in the analysis. Plan data was obtained from insurance records made public by the Department of Health & Human Services. Data for 2013 plans was collected on April 9, 2013. Data for 2014 plans was collected on August 30, 2014. Premium quotes generated for each health plan were based on the following profiles: 23-year-old non-smoker with no spouse or children, 30-year-old non-smoker with no spouse or children, and 63-year-old non-smoker with no spouse or children.

This analysis assumes that the underlying government data is accurate. While every effort was made to use a comprehensive collection of plans, HealthPocket makes no representation that every plan in the individual insurance market or in an individual state was included in this analysis. Percentages are rounded according to standard industry practices.


This analysis was written by Kev Coleman, Head of Research & Data at HealthPocket with primary data research performed by Jesse Geneson, data researcher at HealthPocket. Data collection and analysis for 2013 plans was performed by Michael Bass. Correspondence regarding this study can be directed to Mr. Coleman at kevin.coleman@healthpocket.com.

Kev Coleman on Google+
Jesse Geneson on Google+


1 New York and Vermont use community ratings with constant premium rates between ages 21 and 64 that do not vary based on smoking status. Market Rating Reforms: State Specific Rating Variations. August 28, 2014. CCIIO. http://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/state-rating.html
2 Julie Appleby. “Why Some Virginia Health Plans Cost So Much.” October 13, 2013. Kaiser Health News. http://www.kaiserhealthnews.org/stories/2013/october/13/why-some-virginia-health-plans-cost-so-much.aspx
3 “…In the pre-reform market weight loss surgery was not covered by 90% of plans while under Obamacare this exclusion has lowered to 59% of health plans.” Kev Coleman, Jesse Geneson. “Top 10 Medical Services Excluded Under Obamacare.” February 26, 2014. HealthPocket. https://www.healthpocket.com/healthcare-research/infostat/top-10-excluded-services-obamacare
4 Kev Coleman. “Health Insurance Application Rejection Rates Rising?” January 24, 2013. HealthPocket. https://www.healthpocket.com/healthcare-research/infostat/health-insurance-application-rejection-rates
5 Only 20% of health plans examined in the pre-reform market did practice rate-ups for any applicants. Kev Coleman. “80% of Health Plans Charge Higher Premiums than Quoted.” February 19, 2013. HealthPocket. https://www.healthpocket.com/healthcare-research/infostat/80-percent-of-health-plans-charge-higher-premiums-than-quoted
6 “Citizens and legal residents in families with incomes between 100% and 400% of poverty who purchase coverage through a health insurance exchange are eligible for a tax credit to reduce the cost of coverage.” Kaiser Family Foundation. “EXPLAINING HEALTH CARE REFORM: Questions About Health Insurance Subsidies.” July 2012. http://kaiserfamilyfoundation.files.wordpress.com/2013/01/7962-02.pdf
7 Jesse Geneson, Kev Coleman. “18-34 Year-Olds Can Face 41% Narrower Income Bracket to Qualify for Obamacare Subsidies.” March 12, 2014. HealthPocket. https://www.healthpocket.com/healthcare-research/infostat/18-34-year-olds-face-smaller-income-window-for-premium-subsidies
8 Kev Coleman. “Top 10 Medical Services Excluded by Health Insurance.” July 31, 2013. HealthPocket. http://www.healthpocket.com/healthcare-research/infostat/top-10-medical-services-excluded-by-health-insurance
9 Kev Coleman. “Almost No Existing Health Plans Meet New ACA Essential Health Benefit Standards.” March 7, 2013. HealthPocket. http://www.healthpocket.com/healthcare-research/infostat/few-existing-health-plans-meet-new-aca-essential-health-benefit-standards
10 Vermont premium averages used premiums for every metal plan listed under 2014 Health Plans on the Vermont Health Connect website. http://info.healthconnect.vermont.gov/healthplans

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