New research proves wrong early predictions of widespread premium rate increases for patients purchasing health insurance through state marketplaces.
Contrary to double-digit increase predictions, a November Urban Institute analysis found only a 4% increase in the average premium of the lowest-cost silver plan across 20 states and D.C. in 2016.
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Urban Institute researchers, with funding from the Robert Wood Johnson Foundation, studied each insurer’s lowest-cost silver marketplace plan premium for a 40-year-old, non–tobacco-using patient in selected areas within 20 states and the District of Columbia in 2015 and 2016. Investigators gathered 2016 premium data from publicly available rate filings posted on the websites of state departments of insurance. 2015 premiums were obtained from Healthcare.gov and state-based marketplace websites. Findings showed the average premium for the lowest-cost silver plan rose by less than 5% in five states, increased between 5% and 10% in five states, and increased by more than 10% in four states. In six states and D.C., the average premium of the lowest-cost silver plan decreased.
Researchers noted that regions with lower 2015 premiums tended to have larger cost increases in 2016 than did states that began with higher 2015 baseline premiums. The overall 4% increase average premium rate increase for lowest-cost silver plans in 2016 is up from a 3% average increase in 2015. Authors conclude that insurers may have priced aggressively early to gain market share, then modified their strategies this year. Authors forecast that it will take a few more years for insurance risk pools and premiums to stabilize.
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