The price of health insurance premiums on plans purchased outside of the federal and state exchanges are much higher than expected, a survey of brokers found.
A proprietary survey of 148 brokers conducted by Morgan Stanley analysts revealed the largest acceleration in small and individual group rates in the survey’s history, Forbes contributor Scott Gottlieb of the conservative American Enterprise Institute first noted.
The survey found that the prices for off-exchange plans in the small group market increased by an average of 11 percent, while off-exchange plans on the individual market increased by an average of 12 percent. Analysts noted that the prices tended to vary by state, with some states showing increases 10 to 50 times that amount, Gottlieb wrote.
According to the latest Census data, about 14.5 million—or 5 percent of the U.S. population gets health insurance on the private exchange.
The Morgan Stanley report attributed the increases to “changes under the ACA” including the new excise taxes being levied on insurance plans, and the new requirements that plans provide more robust coverage.
An earlier survey conducted in January also found rising rates, but the newest numbers show even steeper hikes. The older survey indicated that rates were increasing by 6 percent in the small group market and 9 percent in the individual market.
The latest survey found that states seeing the steepest price increases for off-exchange individual plans include Delaware—where off-exchange plans increased by 100 percent, New Hampshire increased by 90 percent, Indiana by 54 percent, California by 53 percent and Connecticut by 45 percent.
Meanwhile, as Forbes noted, small group market plans increased the most in Washington by 588 percent, Pennsylvania by 66 percent and California by 37 percent.
Meanwhile, premiums for plans purchased on the state and federal exchanges tend to have cheaper premiums than comparable employer-based plans, though they have higher deductibles.
A report released by PwC’s Health Research Institute found that the average cost of premiums sold on the Obamacare exchanges is about $5,844 annually —or 4 percent less than the average cost of $6,119 for an employer-provided plan with comparable benefits.
Meanwhile, a HealthPocket.Inc study found the average individual deductible for Obamacare’s bronze plan was $5,081 a year—42 percent higher than the average deductible of $3,589 for an individually purchased plan.
Premiums on exchange plans are also likely to increase next year. The Hill reported that industry insiders are expecting premium prices to increase significantly—in some states by as much as 300 percent—all depending on a combination between the final mix of enrollees and new taxes imposed under the new law.
Whether those increases will be substantial is still unclear, however, as some insurers are still accepting enrollment applications through April. Companies will be submitting their prices for next year and rates won’t be announced until the fall.
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