Analysis of 2015 Premiums as the Second Year of Marketplace Open Enrollment Approaches

The second year of open enrollment for health insurance purchased through the healthcare exchange begins on November 15 and closes on February 15, 2015. Coverage can begin as soon as January 1, 2015, for the second year of the government-backed insurance marketplace. With open enrollment right around the corner, a report from the Kaiser Family Foundation examined changes in coverage under the Patient Protection and Affordable Care Act (ACA) moving into 2015.

One the most tangible tests as to how the healthcare law is performing is how much premiums rise in the next year of enrollment. The report examined data from states that provided publicly available data, examining how much new coverage will cost enrollees and the federal government, which contributes toward premiums through tax credits for low- and middle-income citizens, and could influence public perception on the law as a whole. The Kaiser report includes information on 15 states and the District of Columbia.

The analysis specifically examined the lowest-cost bronze and silver plans offered on the exchange in an effort to provide a benchmark for tax credits provided to individuals purchasing insurance from the marketplaces, as these are the least expensive plan options for individuals without employer-sponsored coverage. In addition, the researchers found that people who purchased insurance in the inaugural year tended more often to select lower premium plans.

Across the 15 specific cities examined in the report, the second-lowest silver plan in the marketplace is expected to see premiums decrease by an average of –0.8% moving into the 2015 coverage period.

The percentage of individuals eligible for a tax credit enrolling in the second-lowest silver plan is expected to increase in 2015 to between 2.01% and 9.56% compared with between 2% and 9.5% in 2014 (Table 1). However, the researchers noted that poverty levels have increased, so an individual with the same dollar income as 2014 will be at a lower percentage of poverty in 2015 and will therefore pay a smaller share of their income toward the premium.

Though tax credits could make up for increasing premiums, subsidized enrollees may still face large premium increases if they are enrolled in a plan that is no longer a low-cost plan and they fail to switch during the next open enrollment period. In 12 of the 16 cities examined in the Kaiser report, at least 1 of the insurers that had offered one of the lowest-cost silver plans in 2014 is no longer planning to offer a low-cost silver plan in 2015.

The Kaiser report pointed to an example of this; in 2014 Humana offered the second-lowest silver plan in Denver, Colorado, with a premium of $250 of age. However, in 2015, although Humana is lowering its premium to $249 per month, another insurer, Colorado Health Insurance, is undercutting it, offering a plan for $211 per month. If the hypothetical single adult 40 years of age were to switch from the Humana plan to the Colorado Health Insurance plan, that individual would pay $208 per month under the tax credit schedule. If said individual were to stay with the Humana plan, that person would end up paying $208 per month plus the premium difference between the 2 plans, totaling $246 per month, an increase of 17.7%.

Overall, insurer participation has increased or remained the same in most of the cities that were analyzed for this report (Table 2). In general, premium changes for 2015 are mostly modest when accounting for the low-cost insurers, which is where enrollment is concentrated.

The Kaiser analysis was generated through data collected from health insurer rate filings submitted to state regulators, which are publicly available for the states included in the analysis. In states where filing was unavailable, the researchers gathered data from tables released by state insurance departments. The numbers used in this analysis were still preliminary. All premiums included were at the rating area level, and some plans may not be available in all cities or counties within the rating area.—Kerri Fitzgerald