ObamaCare advocates have said for years that the Affordable Care Act was not the cause of rising premiums, but that argument is no longer plausible due to findings from new data from eHealth.
eHealth sells ObamaCare Marketplace health plans. The company also sold a wide variety of health plans through its own website. This was done for many years before the ACA was passed.
It turns out that across the board… For all ages and family sizes… For HMO, PPO, and POS plans… premium increases averaged about 60 percent from 2013, the last year before ACA reforms took effect, to 2017.
In same length of time preceding that, all groups experienced premium increases of less than 10 percent. Most age groups actually experienced premium decreases, on average.
These findings come from new data from eHealth. It sells ACA Marketplace health plans. It also sells a wide variety of health plans through its own website for many years before ObamaCare was passed, as well as both on and off the Exchanges after the ACA took effect.
For years starting with 2014:
The data include ACA-compliant, non-employer-sponsored plans sold both on and off exchanges. It does not include premium subsidies, which in any case are available only to on-exchange purchasers with qualifying income.
The data allow us to break down the pre- and post-ACA changes by age, individual vs. family, and plan type. Overall, Health Maintenance Organization (HMO) premiums actually decreased 4.6% in the four years before the ACA reforms came into effect (that is, from 2009 to 2013). It increased 46.4% in the first four years under ObamaCare.
Point-of-Service (POS) premiums decreased 14.9% before the ACA, and increased a whopping 66.2% afterwards. Premiums for the more common Preferred Provider Organization (PPO) plans increased 15% in the four years before the ACA, and 66.2% afterwards.
In each case, the increases differed among age groups. Families headed by those under 30 and over 50 generally being hit the hardest by the ACA premiums increases. However, once we remove the self-sorting into different plan types, and average each age group and household type (i.e., family or individual), the results are very consistent. In the four years before ObamaCare, every age group and family type either experienced a premium decrease, or an increase of 9.2% or less.
However, in the first four years of the ACA, every age group and household type experienced an increase of between 56.0% and 63.2%. For something as complex as health care, that’s a pretty narrow range. The dollar amounts of the increase varied from $2,524 for an individual between the ages of 31 and 40, to $12,040 for a family headed by someone over age 60. But the percentages are remarkably consistent: The ACA raised premiums by about 60 percent.
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It does not get any clearer than that.
Each year insurers submit filings to state regulators. They detail their plans to participate on the Affordable Care Act marketplaces (also called exchanges).
These filings include information on the premiums insurers plan to charge in the coming year and which areas they plan to serve. Each state or the federal government reviews premiums to ensure they are accurate and justifiable before the rate goes into effect. Regulators have varying types of authority and states make varying amounts of information public.
An analysis of health insurance costs conducted by eHealth finds that projected rate increases for 2018 health insurance plans would make coverage unaffordable for many, according to the rules of Obamacare.
eHealth’s analysis shows that projected costs for 2018 health insurance plans would be officially unaffordable for 29% of individuals and 54% of families who bought their health insurance at eHealth during the 2017 open enrollment period.
Several states have announced rates for health insurance premiums on the Obamacare exchanges for 2018. Topping the list is Georgia, with rates that are 57 percent higher than last year, while Florida said some premiums will be 45 percent higher.
For its analysis, eHealth looked at quoted health insurance premiums for the lowest cost bronze-level health insurance plan across all 50 states during the 2017 open enrollment period. They then added 28% to these figures to estimate costs for 2018. This percentage increase is based on estimates published by Oliver Wyman Health. They projected that rate increases would range from 28% to 40% for 2018.