I’ve been doing a lot of research on the state of policies sold on the health insurance exchanges. It’s not easy because the Obama administration, as even its friends acknowledge, has not been forthcoming with information. It has, however, placed some useful information in the public domain: two large databases of the plans being sold on the “Federally Facilitated Marketplace.” That’s the health insurance Exchange for states, like Texas and many others, that declined to establish their own exchanges. With the help of the R computer language, I’ve been sorting through this database and have reached the following conclusions.
- The change in premiums between 2014 and 2015 depends significantly on the metal level of the plan and whether it is a PPO or HMO.
- Gross premiums for platinum plans are up significantly in price, 21%, whereas bronze plans and catastrophic plans are down over 11%. The high increase in gross premiums for platinum plans creates a serious potential for an adverse selection death spiral in that segment of the market.
- Net premiums will show larger percentage increases and decreases than gross premiums for many individuals. This is so because substantial parts of the premiums are paid via subsidies from the federal government.
- PPO plans are up substantially in price, 8%, whereas HMO plans are down substantially, -18.%.
- The combination of increases in the more generous platinum and PPO plans and decreases in the less generous bronze and HMO plans may start to divert Americans into healthcare plans that offer lower benefits and somewhat less choice, albeit at a lower price than was paid this past year.
- Among plans that persisted between 2014 and 2015, the premium variations are less extreme: persistent bronze plans increased in price by 9.5% whereas persistent platinum plans increased in price by 14%. The larger variation in gross premiums overall is thus likely due to the exit of carriers who priced at extremes and low pricing by new entrants for bronze plans but very high prices for the more generous plans.
- Cost sharing for the plans has increased somewhat, but many cost sharing arrangements have remained largely the same.
- Competition, as measured by the number of unique issuers offering plans in each county, has increased substantially since 2014, but a market in which three or more insurers are actively competing is still a rarity, particularly for the plans that give consumers a greater amount of choice in selecting their doctor.
You can read a copy of the full report, which contains 29 tables of information, here.
I’m also happy to provide the data and code on request.