PPACA could bump Florida silver plan rates 35 percent

The Florida Office of Insurance Regulation has tried to come up with a better yardstick for measuring how the new federal health care law will affect insurance prices.

Officials created a table that uses two different methods to estimate the effects of the Patient Protection and Affordable Care Act on the prices of the individual policies sold through the state exchanges in 2014.

Using one method -- the "gross annual premium" method -- officials found prices for individual "qualified health plans," or exchange coverage, could be about 39 percent higher than they would be without PPACA.

The size of the PPACA effect on QHP prices ranged from 14 percent to 55 percent, officials said.

Using another method -- the comparison of each company's "average silver plan premium" with an "adjusted standard risk rate premium" -- officials found PPACA might be increasing individual QHP prices an average of 35 percent, with a range of 7.6 percent to 59 percent.

Florida officials did not make direct comparisons of 2014 rates and 2013 rates, because the QHPs will not exist until 2014.

The methodology

In Florida, the Centers for Medicare & Medicaid Services will run both the individual exchange and the Small Business Health Options Program small-group exchange.

State insurance officials reported at a presentation yesterday that PPACA might be increasing 2014 QHP prices about 30 percent to 40 percent for individuals and 5 percent to 20 percent for businesses.

Officials prepared the new table after getting questions about how well they were making apples-to-apples comparisons.

When Florida officials compared the effects of PPACA on gross annual premium, they started by coming up with an estimate of the overall average monthly premium per insured Florida resident for 2012.

The officials then adjusted the overall for health care inflation and calculated the gap between each exchange carrier's average monthly premium per person and the inflation-adjusted statewide average.

Officials assumed health care costs are rising about 8.9 percent per year.

To create the "average silver plan premium" estimates, the officials used industry premium data to estimate what the average for a reasonably healthy person with moderately generous, "silver level" coverage would be.

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