The early numbers for 2015 premium rates are trickling in, and despite many doom-and-gloom predictions from analysts, the results are not that bad. So far, anyway, premium hikes appear to be relatively modest — if varied.
In a report produced by Avalere Health using the preliminary rate filings that were publicly available as of June 11, analysis demonstrated a lot of cost variation from region to region. Oregon clocked in with the lowest premiums at a $272 monthly average, while Vermont's rates were almost twice that. Within a given state, premiums varied depending on city size, and the report indicated that variation is likely to increase. The most dramatic example in the study was Indiana, where proposed premiums varied from $211 to $587 per month.
Avalere's analysis is backed up by a recent Wall Street Journal review, which found that in nine out of the 10 states that had completed their filings as of publication on June 18, the largest health insurer in the state is proposing premium increases between 8.5% and 22.8% for 2015.
Pricing next year's premiums has been a guessing game for insurers and analysts alike, an uncertainty primarily created by the fact that many consumers waited until the March deadline to purchase plans; understanding of how enrollees are utilizing health services is still murky. That said, competition is on the rise as insurers with low enrollment cut rates in order to attract customers and insurers who sat out the first year of the ACA jump into new markets (the Journal notes that United HealthCare, for example, will enter Connecticut, Michigan, Rhode Island and Washington next year).
As to how much impact the Affordable Care Act has had? That remains to be seen. Insurance companies have said that fees and coverage mandates under the PPACA have dictated rate increases, but recent research by MIT economics professor Jonathan Gruber, PhD showed that prior to the implementation of the health law, individual health insurance plan premiums grew by 10% or more per year from 2008 to 2010. Medical inflation, estimated at 5.4% for insured people this year, is as likely a culprit as the ACA.
Stay tuned through the summer as some of the higher-population states like California and New York file their rates.