NCPA - National Center for Policy Analysis

How Do 2015 Premiums Compare to 2014?

December 5, 2014

The Obama administration contended that the Affordable Care Act would send health insurance costs down, but premiums initially increased up to 50 percent for some insurance plans last year. The administration also promised that the ACA would keep year-to-year premium increases below typical levels. Is that the case?

Conor Ryan, health care data analyst at the American Action Forum, explains what Americans' 2015 premiums are going to look like. For 2015, the second-lowest cost Silver plan (called the "benchmark" Silver plan) offered on the exchanges had premiums just 1.6 percent greater than in 2014. However, Ryan notes that many of the 2015 plans have changed since 2014. For the 2014 benchmark plans still offered in 2015, premiums increased 5.8 percent ($480 for a family of four).

However, he cautions against looking solely at average premiums increases, explaining that increases varied wildly. Looking at the cheapest Bronze plans offered on the exchanges, Ryan determined that premiums increased by 3.4 percent. But out of 407 rating areas, Bronze plans were 5 percent less expensive in 97 rating areas but 10 percent more expensive in 116 rating areas.

Which areas saw the smallest premium increases? Areas with more competition:

  • Areas that had the same number of participating insurance companies in 2015 or only increased that number by one saw the premiums of the cheapest bronze plans increase by 5.2 percent and benchmark premiums increase by 3.1 percent.
  • But in areas with at least two additional participating insurers, premiums for the cheapest Bronze plans increased just 2.8 percent, while benchmark plan premiums increased just 0.1 percent.

Ryan also reminds readers that premiums increased dramatically between 2013 and 2014 (with increases of 50 percent), so the smaller premium increases from 2014 to 2015 should not be taken as an indication that the law is succeeding in making health care less expensive. 

Source: Conor Ryan, "Averages Won't Tell the Story: 2015 Exchange Premiums," American Action Forum, December 4, 2014. 


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