Increased Competition on HealthCare.gov Helped Constrain Premiums
U.S. residents who enrolled in health coverage through the federal exchange had a broader choice of plans in 2015 than they did in 2014, which helped to constrain premium cost growth, according to an HHS report released Thursday, the Washington Post reports.
For the report, HHS examined the number of insurers that participated in the federal exchange in 2014 and 2015, as well as differences in premium prices between the two years. The report included data from the 35 states that used the federal exchange for enrollment.
According to the report, 86% of exchange shoppers in 2015 could choose from coverage offered by at least three insurers, up from 70% in 2014 (Sun, Washington Post, 7/30). The report noted 59% of counties gained at least one insurer in 2015, while 33% had the same number of insurers and 8% saw a decline. According to the report:
- Competition was broader in counties with higher populations; and
- Markets with higher numbers of 2014 enrollees were more likely to have increased competition in 2015 (Pear, New York Times, 7/30).
Meanwhile, average premium costs increased by about 2% for one of the most-selected silver plans from 2014 to 2015. According to the report, premiums for silver-level plans in counties with at least one new insurer participating in the exchange were about 8.4 percentage points lower than those in other counties (Washington Post, 7/30). In comparison, premiums in counties with fewer insurers participating in the exchange increased by about 12%. The report noted consumers in many counties had to switch health plans in order to avoid premium increases (New York Times, 7/30).
HHS Secretary Sylvia Mathews Burwell said, "This report shows that increased competition in a market, as occurred in most areas of the country in 2015, has an important impact on cost" (Washington Post, 7/30). She added that the ACA "is working to increase choice and competition for consumers and keep premium growth in check" (New York Times, 7/30).
In addition, Richard Frank, HHS assistant secretary for planning and evaluation, said federal officials think "there will be competition" in the federal exchange in 2016, as well as "fairly modest premium growth" (Washington Post, 7/30).
Observers Question Potential Effects of Insurance Mergers
Some observers question the potential effects recently proposed mergers of large health insurance companies could have on market competition going forward. Justin Holland, a Texas-based insurance agent, said the mergers "shrin[k] the carriers," which is "not good for the consumer right off the bat."
However, Frank noted that the proposed mergers will be subject to a lengthy regulatory approval process. As a result, Frank said it is difficult to predict how the mergers could affect competition and premiums in the federal exchange (Ungar, USA Today, 7/30).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.