Republican opposition notwithstanding, the Patient Protection and Affordable Care Act is working almost exactly as planned.
Nationwide, average premiums for marketplace plans held steady from 2014 to 2015, and deductibles on average increased just one percent. In some states, premiums decreased. Meanwhile, carrier participation is up all across the board in 2015 compared to 2014, and the premium for the carefully watched benchmark plan (second lowest-cost silver plan) didn't budge from year to year.
That's the word from research commissioned by The Commonwealth Fund and conducted by a team from the University of Chicago. The report called the stability of the plans "unprecedented when compared with historic trends in both the individual insurance market and employer-based health insurance."
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The study cited three major factors that led to the market stability: "an increase in the number of participating insurance carriers; the design of the marketplaces; and the risk stabilization programs for participating insurers."
Among the highlights of the study:
- There were double-digit increases in 10 states plus the District of Columbia (Alaska, the District of Columbia, Iowa, Louisiana, Minnesota, Nebraska, New Hampshire, North Carolina, Pennsylvania, South Carolina and West Virginia).
- Average premiums declined in 14 states (Arizona, Colorado, Connecticut, Hawaii, Illinois, Maine, Michigan, Mississippi, New Mexico, Oklahoma, Oregon, South Dakota, Virginia and Washington).
- Single-insurer market decisions drove increases and decreases in some states. In Minnesota, PreferredOne — the carrier with the lowest statewide premiums and largest market share — exited the market, driving up the average cost of a marketplace plan. In Virginia, Optima Health, a carrier charging $2,000 a month for a silver plan,a figure nearly seven times the cost of the average silver plan, dropped this expensive plan, thereby sharply decreasing the average cost for plans in Virginia.
- Two states, Alaska and Minnesota, had double-digit increases in the cost of the benchmark plans.
- Premiums for the benchmark plan declined in 20 states, with six states having double-digit decreases (Colorado, Connecticut, Mississippi, New Hampshire, New Mexico and Rhode Island).
- The number of plans offered nationwide increased by 25 percent, and 50 more carriers offered plans in urban areas.
- Slightly more states saw increases than decreases in plan deductibles (26 states versus 19).
The authors noted that the current period of no-to-low growth in premium and deductible costs could well be merely a blip.
"An outstanding question, however, is the long-term sustainability of current trends in premiums," they wrote. "Future price increases of marketplace plans will depend on how effectively America reforms the delivery of care and moves from a system that rewards high volume to one that rewards high-quality care."
In addition, the continued GOP assault on the risk stabilization formula (also known as risk corridors) could undermine one of the three legs of the stabilization stool cited by the researchers.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
