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So What is Happening with Premiums in Exchange-Land?

By September 10, 2018Commentary

Most of the premium filings are in for insurers who plan to sell coverage on the insurance exchanges.  A website and report give some sense of the direction, but I can’t find anything that gives the most useful information, what the is actual increase for plans that people actually select.  But the filings give us an idea of trends.   (ACA Premium Report)   According to the report, premium increases for 2019 plans will be less than 4%, but that is across all plans in all states.  This compares to more specific rate rises, like in 2018 the cost of the most common plan–silver, rose 32% from 2017 and bronze premiums increased 17%.  Some states do have high increases, for example, Kentucky and Connecticut appear likely to see 12% average premium growth.  But in some states there could be decreases in average premiums–Tennessee could see an 11% drop and New Hampshire a 13% one.  Lower premium trends may be due to increased competition, as new health plans are entering the market and some established ones are expanding their geographic presence.  I would not expect the lower premiums to last, as experience shows that these new plans almost always underprice risk to get business and then have to raise premiums dramatically to recover.

I am sure that consumers are greatly comforted by hearing that increases are “moderating”, especially when they are still well above the rate of personal income growth and still generally impose very substantial cost-sharing burdens on the patient.  The author of this report claims that premiums would have gone down if the individual mandate were still in effect and people couldn’t access short-term plans.  Yeah, so let’s make people buy something that they don’t want or need so they can subsidize the health care needs of other people, many of whom have those needs because they have engaged in irresponsible health behaviors, like smoking, eating too much, using drugs and alcohol, etc.  That seems really fair to me.  He refers to these changes to the reform law as “sabotage”, but it looks more to me like restoring some freedom of choice to individuals and making people pay the full price for their own behavior.  And of course, the people who really do need help with health expenses that are due to factors beyond their control, get screwed the most because they have to get coverage and have to pay more for it.  Forcing people to buy a product they don’t want or need is not a solution to the problem.

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