Many health reform opponents warned that people buying health insurance in the individual market would face a sharp, pervasive spike in premiums. The Manhattan Institute predicted that “Obamacare” would bring double-digit premium increases, while the Heritage Foundation wrote, “individuals in most states will end up spending more on the exchanges” (or marketplaces) than they previously paid. Not only did those dire predictions fail to come true, but there’s good news to report about premiums as open enrollment under the Affordable Care Act (ACA) approaches.
To be sure, some people buying coverage in the pre-health reform individual market saw their premiums rise, partly due to more robust benefits and market reforms under the ACA that barred insurers from charging higher premiums to people with health conditions. But for many others, health reform’s consumer protections and premium subsidies to buy marketplace coverage brought lower premiums or the ability to buy coverage for the first time. Now, as the November 15 start of the ACA’s second open enrollment season draws closer, the outlook for 2015 premiums in the individual market is even more encouraging.
Unsubsidized premiums for the silver-level “benchmark” plans in 16 cities around the country are falling by an average of 0.8 percent compared with 2014, according to a recent report by the Kaiser Family Foundation. The cheapest bronze-level plan (a basic plan under health reform) in those same areas is rising by an average of just 3.3 percent in 2015.
Those rate changes mark an improvement over the pre-ACA market. Individual-market health insurance premiums rose an average of 10 percent each year in 2008 through 2010, according to a Commonwealth Fund study. For 2014 to 2015, the consulting firm PricewaterhouseCoopers estimates a 7 percent average increase in premiums (across all plan tiers and without accounting for subsidies) in the individual markets of those states for which it has data. Premiums for the cheapest silver plans will rise an average of 8.4 percent in select states that the McKinsey Center for U.S. Health System Reform reviewed.
Of course, preliminary 2015 premiums vary significantly from state to state and insurer to insurer. This variation means some consumers could see a higher price tag in 2015 for the plans they have now. But many will be able to find coverage for the same or a lower price — provided they’re willing to shop around during open enrollment.
The bottom line: widespread rate shock isn’t happening. Yet another attack on health reform is falling flat.