Analysis Shows Wide Variance in ACA Premiums From 2014 to 2015
The wide variance in premiums for coverage purchased in Colorado through the Affordable Care Act's exchange "offers a case study of the ambitions and limits" of the law, the New York Times reports.
For example, a Times analysis found that the cost of one mid-range silver plan declined by 40% from the first open enrollment period to the second in the northeastern plains, while the cost of a similar plan increased by 36% west of the Rocky Mountains.
According to the Times, the variation in cost stems in part from several insurers pricing plans as low as possible to attract more enrollees. However, it is unclear whether the low prices are sustainable, and as a result, prices could increase significantly with time.
The variation also comes from laws that allow insurers to target specific regions within a market where insurers can draw in enough members to create networks to negotiate prices, according to the Times. In addition, federal policies aimed at reducing losses for insurers allow them to experiment with low prices that might prove unsustainable over time.
Premiums Remain in Flux Nationwide
Across the country, premium costs are not expected to stabilize in the near future, the Times reports.
An Avalere study found that silver plan prices remained unchanged between 2014 and 2015 in just 13% of regions in states that use the federal exchange.
According to Times, prices fluctuate when insurers make incorrect predictions, especially when those insurers enroll a large percent of the individual market. For example, PreferredOne, an insurer in Minnesota, increased rates by about 63% in 2015 and will no longer offer plans on the state exchange.
In Colorado, co-op insurer Colorado HealthOP, lowered premiums by about 40% for many of its plans as part of an effort to increase enrollment. Enrollment increased after premiums dropped, but the move raised question among brokers and others about whether it priced its plans unrealistically low, according to the Times. Colorado HealthOP said it is too early to determine whether it priced its plans appropriately (Abelson/Armedariz, New York Times, 1/19).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.