Health insurance premiums are expected to rise for 2017, but by how much will vary by geographic area, an early analysis from Avalere Health finds.
Premium rate requests were due to state insurance agencies earlier this month, and complete data is available in nine states so far, on which Avalere based their analysis — the first summary of the 2017 proposed rates. Proposed rates increased across all silver plans, but ranged from a 5 percent increase in Washington to a 44 percent increase in Vermont, the report says.
But premiums for lower-cost silver level plans decreased less or didn’t actually go down, compared to the higher-cost plans in that tier, and that holds true in most states, the analysis finds. The silver-tier plans are the most popular among consumers.
Data is currently available for Indiana, Maryland, Maine, New York, Oregon, Virginia, Vermont, Washington and the District of Columbia.
In competitive markets, however, the increases for those plans will likely be less, the report says.
“Despite premiums rising overall, many consumers will be insulated from higher rates due to premium subsidies that limit monthly costs for many exchange enrollees” Caroline Pearson, a senior vice president at Avalere, said. “Consumers may have to switch plans in order to avoid dramatic rate increases, but competitive options should still be available in most regions in the U.S.”
Avalere analysts say the final rates, which won’t be finalized until the fall, could go down, but will still likely be higher than 2016 premiums. The Department of Health and Human Services has said premium rate requests regularly show higher increases than the actual rates show. The agency released a report last month that argued customers should not worry about proposed rate increases.
The Avalere analysis counters that argument, pointing to a similar report conducted last year that showed smaller increases in the initial requests than for 2017, which they say indicates that premium increases this year will be higher.
The fact that premium increases would vary geographically isn’t new, though. Another report released today through the Robert Wood Johnson Foundation and the Urban Institute showed that the average premium increases between 2015 and 2016 varied from state-to-state and within states.
Just more than a quarter of people in the U.S. (26 percent) live in regions that saw the average premium for lower-cost silver plans increase more than 15 percent between 2015 and 2016, that report says. Across the country, the average premium increase for lower-cost silver plans was 8.3 percent, it says.
“The results of this analysis indicate that, where markets are competitive, premium levels and premium increases tend to be lower,” the report says. “This most often occurs in large states and in urban markets.”
Large premium increases typically have decreased enrollment in a plan, that report adds. HHS has frequently touted that customers returning to the exchanges during the most recent open enrollment period were active shoppers, searching for a new plan that would be the best price for them.
“These competitive pressures, present in many markets and for large swaths of the population, tend to keep premium increases in check,” the report says, looking forward to costs for 2017. “So although increases will undoubtedly be substantial in some areas with weaker competition, the experience will vary considerably across the country with no overall average able to meaningfully describe the dynamics of marketplace premiums.”
Information about premium rate increases will start to be available on HealthCare.gov soon, Sen. John Barrasso (R-Wyo.) said Tuesday. The high request rates show that health insurance is becoming more expensive under the Affordable Care Act, and often have less value for customers, he told reporters at the Capitol.
“President Obama went on the attack years ago before the health care law was passed talking about junk insurance,” Barrasso said. “It is a mandate, not to get care, but to get coverage, and many people are finding the coverage is not at all of value to them because they can’t get care.”