‘Silver’ Exchange Plan Premiums Lower Than Expected, Report Says
Premiums for mid-range or "silver" health insurance plans offered through insurance exchanges created under the Affordable Care Act are significantly lower than the Congressional Budget Office previously predicted, according to a report released Wednesday by Avalere Health, Modern Healthcare reports.
According to Modern Healthcare, the finding could be an indicator that substantially large premium rate hikes -- or so-called rate shock -- is "not happening."
For the report, Avalere compared CBO estimates for silver plan rates for 2016 with comparable insurer rate filings for 2014 that were made available this month (Block, Modern Healthcare, 6/19). So far, nine states have made their rates public (Baker, "Healthwatch," The Hill, 6/19).
Avalere focused its analysis on silver plans because they are poised to be tied to federal subsidies, meaning the federal government would pay more or less depending on how expensive or inexpensive the plans' premiums are, the Wall Street Journal's "MarketWatch" reports (Britt, "MarketWatch," Wall Street Journal, 6/19).
Avalere Vice President Caroline Pearson said the "initial data suggest that competition in exchanges is working to lower premiums, which will benefit nonsubsidized enrollees and the federal government" ("Healthwatch," The Hill, 6/19).
More Details From Avalere Report
The report found that publicized 2014 premium rates ranged from $205 per month in Oregon to $413 per month in Vermont. CBO previously projected that premiums for benchmark plans in the exchanges would cost an average of $433 per month ("MarketWatch," Wall Street Journal, 6/19).
However, the Avalere report found that premiums rates for younger, healthier consumers likely will increase because of a narrower 3-to-1 age-band ratio, which requires insurers to charge older, sicker customers no more than three times that for younger, healthier customers (Modern Healthcare, 6/19).
Avalere also cautioned that its report examined 2014 rates against CBO's estimated 2016 rates, which means that actual rates potentially could reach CBO's estimates, particularly if insurers offer lower rates to attract consumers before they raise premium prices ("MarketWatch," Wall Street Journal, 6/19).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.