Competition and Choice
in the Health Insurance Marketplace Lowered Premiums in 2015
Special to The Truth
The Health Insurance Marketplace established
by the Affordable Care Act allows consumers to shop for
health insurance plans based on key factors, such as covered
services, providers, and importantly, price. According to a
report released today, choice and competition increased in
the 2015 Marketplace and consumers benefitted as new issuers
entered and price competition intensified. In 2015, 86
percent of Marketplace-eligible consumers could choose from
at least three issuers, up from 70 percent in 2014.
Counties with net increases in issuers tended
to have lower premium increases than other counties in
2015. Premium growth for the second-lowest cost silver plan
in counties with at least one new issuer was 8.4 percentage
points lower than in other counties. And for each new
issuer that offered coverage, there was a 2.8 percentage
point lower rate increase for the second-lowest cost silver
plan from 2014 to 2015.
“Today’s study shows the Affordable Care Act
is working to increase choice and competition for consumers
and keep premium growth in check,” HHS Secretary Sylvia M.
Burwell said. “This report shows that increased competition
in a market, as occurred in most areas of the country in
2015, has an important impact on cost. That’s good news for
the economy, and helps more people find quality affordable
health coverage that meets their budget.
Last week’s report examines changes in the
number of health insurance issuers and premiums between open
enrollment periods for the 2014 and 2015 plan years in the
35 states that used the HealthCare.gov platform in both
years.
According to the report, in 2015, most
counties gained at least one new issuer, 33 percent held
steady and only 8 percent of counties experienced a net loss
of issuers. New issuers entering a market might reduce
premium growth, in part, because they offer plans at lower
premiums, influencing incumbents to moderate their premiums.
The overall growth in second-lowest cost
silver plan premiums between 2014 and 2015 was low,
increasing by approximately two percent on average for
potential enrollees. And premiums in counties with 3 or
more issuers are more than six percent lower than in those
with one or two issuers present.
Previous work
has also shown an inverse relationship between the number of
issuers and premiums: on average, each additional issuer in
a rating area is associated with a 4 percent lower
second-lowest cost silver plan premium.
Open Enrollment for 2016 Marketplace plans
begins on November 1, 2015. Visit
HealthCare.gov
to see if you qualify for a Special Enrollment Period for a
life change like marriage, having a baby, or losing other
coverage, or if you qualify for Medicaid or the Children’s
Health Insurance Program.
To read last week’s report visit:
http://aspe.hhs.gov/health/reports/2015/MarketplaceCompetition/rpt_MarketplaceCompetition.pdf
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