Did Health Insurance Rates Go Up? It's Complicated

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New insurance plans for the Affordable Care Act have increased in price. The health law set up marketplaces that allow for state regulation of insurance plans and price variation according to region. It is difficult to decipher whether premiums are increasing and by what amount. The price increase cannot be determined until facts can be collected about how many people entered the market and what plans they picked.

There are several ways to analyze the prices of coverage plans:

  1. State Averages
  • PWC publishes average rate increase for each state every month as prices have been reported to insurance regulators.
  • The average includes not just the plans that employers choose but also the plans that few customers will buy. This method is not necessarily accurate because, in 2014, almost all shoppers chose from just four of the cheapest plans.
  1. Lowest-cost “silvers”
  • It was the most popular plan for 2014 marketplaces because the plan is required to cover 70% of the average patient’s medical bills. Lower income people can also buy them with the help of deductibles and co-payments.
  • A Times analysis says that prices are increasing by 10% in a fifth of counties across the U.S.
  1. Benchmarks
  • The second cheapest plan in the “silver” category is used to calculate the tax credits that assist middle-income people to pay their premiums.
  • The Kaiser Family Foundation found an average rate increase of only 2% for benchmark plans.
  1. Shop vs. Renew
  • The Upshot Analysis compared the 2014 and 2015 lowest-cost silver plans, and also looked at the specific silver plans that were the cheapest in 2015. The goal was to manifest the differences between if the consumers switched plans to the lower price vs. renewing their plans from the previous year.
  • The analysis found that the increase for consumers who renewed their plans was 9.7%, while the increase for those who switched plans was 3.4%.
  • The problem with this approach is that plans vary in price according to geographical location

Summary by MedicalGroups.com

To read more from the New York Times click here