According to a new report released recently by the US Department of Health and Human Services (HHS), choice and competition enabled premiums in the Health Insurance Marketplace to lower in 2015.
The Health Insurance Marketplace was established by the Affordable Care Act to enable consumers to compare health insurance plans based on key factors such as covered services, providers, and price.
Per a news release from the HHS, choice and competition increased in 2015 as new issuers entered the Marketplace and price competition intensified. In 2015, 86% of Marketplace-eligible consumers could choose from at least three issuers, up from 70% in 2014.
Counties with net increases in issuers had 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, the release explains.
“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 says in the release.
“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.,” she continues.
According to the release, the 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.
In 2015, most counties gained at least one new issuer, 33% held steady, and only 8% 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, according to the report, per the release.
The overall growth in second-lowest cost silver plan premiums between 2014 and 2015 was low, increasing by approximately 2% on average for potential enrollees. And premiums in counties with three or more issuers are more than 9% 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% lower second-lowest cost silver plan premium, the release explains.
Open Enrollment for 2016 Marketplace plans begins on November 1, 2015, per the release.
[Source: US Department of Health and Human Services]
