There has been a great deal of attention recently to the premiums in the Health Insurance Marketplaces (HIMs), and the potential shape of the marketplaces in 2017. The recent announcements by some insurers that they may pull back from their role in the marketplaces authorized by the Patient Protection and Affordable Care Act (ACA) has fueled this interest, along with the annual period when insurers submit their preliminary bids for premiums in the marketplaces, with fears that the growth in premiums may be significant in 2017.

The work done by our research team may provide good background to this discussion.  As part of work being produced for the
Rural Policy Research Institute (RUPRI)’s Rural Health Policy Analysis Center, we have compiled data on essentially all of the marketplaces across the 50 states and the District of Columbia, including the State-Based Marketplaces (SBMs) as well as the Federally-Facilitated Marketplaces (FFMs) over the entire period these marketplaces have been in existence (2014-16).  The focus has been on plan choices, premiums, and affordability of plans available in the 500 rating areas across the U.S.

Some highlights of recent findings:

  • The average number of firms offering plans increased in 2015, but the average number of firms declined slightly in 2016 in urban areas to 4.2 firms, and to 3.2 firms in rural areas;
  • While premium growth was moderate in 2015 (3.5% overall), HIM premiums (pre-subsidy) have grown at a faster rate in 2016 (7.8% overall), as compared to 2015 (Figure 1). Pre-subsidy premiums are displayed for a 27-year-old, and are adjusted for the cost of living across rating areas.
  •  In general, Federally Facilitated Marketplaces (FFMs) and Partnership Marketplaces (PMs) continue to experience higher average premiums than State-Based Marketplaces (SBMs) (Figure 1). 


   

·         From 2015 to 2016, total (pre-subsidy) premiums grew less in highly populated rating areas than in less populated areas (Figure 2).



·         At the county level, as the number of firms increases, premiums increase at a slower rate (with an inverse relationship between number of firms and premium increases).

It is important to note that the data displayed here show total premiums, per month (for a 27-year-old), before the subsidies are applied at the individual level.  In 2016, 85% of individuals received a premium tax credit, and on average these subsidies lowered the premiums by 73%.  Thus, the results here present the total cost of premiums offered in the marketplaces, but not the actual payment made by individuals.

The work presented here is available through the website for the Rural Health Policy Analysis Center, RUPRI, here or http://www.public-health.uiowa.edu/rupri/

The findings are described more fully in a recent presentation, available here.