Obamacare’s second open enrollment begins this Saturday and consumers can already start window-shopping for health policies sold on the federal exchange, HealthCare.gov.
On Sunday night, the window-shopping function of the website became available for people in more than 30 states relying on the federal portal. With this tool, consumers can browse through the different policies available and get details on prices and coverage options. Some states have the functionality to do this as well, but not all.
Health officials said they would be releasing a nationwide analysis of premium prices for 2015 health insurance premiums later this week. In the meantime, a handful of organizations have produced their own analyses of data from state regulators.
On average, consumers can expect modest increases of about 5.6 percent from last year according to PriceWaterhouseCooper, which analyzed data from 43 states and Washington D.C.
WHY THIS MATTERS
• The three-month open enrollment period for plans sold on the exchanges begins on Saturday, Nov 15.
• Consumers are constantly reading headlines with mixed messages about how much premiums will cost next year.
• Premium prices may be increasing at a slower rate, but there are other things to pay attention to, like deductibles and network ranges, when looking at purchasing a health policy.
To be sure, health premiums increase each year and have long before Obamacare. Now, health experts say that because of several provisions in the law, premium price growth is actually slowing.
The average proposed premium was about $381. Of course, the price of premiums varies widely from region to region. In Colorado, for example, rates range from a 22 percent decrease to a 35 percent increase, according to the study.
A separate analysis by the Robert Wood Johnson Foundation found that premiums would increase an average of less than 5 percent from last year. Though the study only accounts for 17 states and DC that have submitted their rates for next year. That figure could change so some experts are skeptical and say it’s too early to tell.
“Studies like the RWJF are only a very small snapshot. It examines premiums in only a few states, and in only select rating areas, as many states did not release them pre-election,” said Josh Archambault, director of health care policy & program manager for the Middle Cities Initiative at the Pioneer Institute. “ So the picture is far from complete.”
Both studies found that price increases tended to be lower in urban areas; people in rural areas might see higher price increases from last year.
Still, as Archambault points out, “premiums only tell a part of the story”—plans on the exchanges tend to have higher deductibles and more limited networks.
“Most insurers have been changing their insurance plan designs dramatically under the federal law. Narrow networks, higher deductibles, and higher out of pocket costs when you visit a doctor are the new norm,” Archambault said. “In other words for many Americans under Obamacare, they are paying more and getting less.”
The tradeoff is that the growth in premium prices (in states that have data available) is more moderate than the sky-rocking premiums many were predicting earlier this year.
Claire McAndrews from Families USA says the slower than average growth of premium prices could likely be attributed to several ACA provisions including the law’s medical loss ratio that requires insurers to spend a certain percentage of their revenue on premiums and sets a cap at how much they can spend on administrative costs.
She also said states that have a rate review process that includes a public comment tool tend to have lower rates than they would have without the process. In New York, for example, insurers proposed an increase of 12.5 percent—but the state ultimately approved an increase of 5 percent after going through a rate review process.
“We think it’s important that states have that authority,” McAndrews said. “It definitely tends to have an effect on the prices.”
Another reason 2015 premiums aren’t increasing dramatically in most regions is because more insurers are participating in the marketplace. According to PwC, the number of health insurers selling plans on the state and federal exchanges is increasing by 25 percent.
An earlier study from HealthPocket found that 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 a comparable individually purchased plan.
To avoid getting slapped with dramatically higher coverage costs than last year, Obamacare advocates are urging consumers to shop around for coverage instead of auto-enrolling if they are returning from last year. Many of the plans have changed; remaining with the same policy instead of comparing plans could result in paying more than necessary.
“It’s really important to compare your options,” McAndrews said. “Your plans might have gone up this year and there might be a better deal for you out there.”
They also remind consumers that, depending on annual income, there are federal subsidies available to make coverage more affordable. The Kaiser Family Foundation has a helpful subsidy calculator here.
Although media attention has swirled around a Supreme Court case that could potentially take away access to these subsidies for people enrolling on the federal exchange, advocates say consumers should sign up regardless as they will likely not have to recoup that money, regardless of how the court rules.
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