ACA exchanges’ silver premiums decrease an average .8% for 2015

September 9, 2014

Premiums for the silver insurance premium plan that is used to benchmark tax credits under the Affordable Care Act (ACA) will fall by an average .8% in 2015, while premiums for the lowest-cost bronze option will increase by an average of 3.3%.

Courtesy of Kaiser Family Foundation.Premiums for the silver insurance premium plan that is used to benchmark tax credits under the Affordable Care Act (ACA) will fall by an average .8% in 2015, according to a new study.

Meanwhile, premiums for the lowest-cost bronze option available through the ACA’s healthcare exchanges will increase by an average of 3.3%.

Silver plans were chosen by 65% of exchange enrollees in 2014, and bronze plans were chosen by about 20% of enrollees, according a report from the U.S. Department of Health and Human Services.

The conclusions are from a report by the Kaiser Family Foundation (KFF), which analyzed data from 16 markets where states released comprehensive data on insurer rates or rate filings. In states where filings were unavailable, Kaiser gathered data from tables released by state insurance departments. The overall picture could change as more premium data become available, notes Kaiser.

“There is variation, but so far, premium increases in year two of the (ACA) are generally modest,” said Drew Altman, Kaiser’s president and chief executive officer. “Double digit premium increases in this market were not uncommon in the past,” Altman added.

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Premium adjustments were expected, according to the report, because in 2013 insurers had difficulty predicting subscriber demographics and gauging risk, but are now able to get a clearer picture.

The average decrease in premiums for the cost silver plan points to competitive forces, but competition can also result in “significant volatility,” said the KFF study.  As a result, people who chose low-premium plans for 2014 may find that the same low-cost option is not available in 2015.

The silver plan is closely watched because it is used as a benchmark to set tax credit subsidies, says the study. If the decline in premiums is observed across the county, the federal government could end up paying less for tax credit subsidies than initially expected.

The full report, Analysis of 2015 Premium Changes in the Affordable Care Act’s Health Insurance Marketplaces, is available online.

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