As the U.S. Supreme Court decides whether to continue allowing the federal exchange to provide subsidies to consumers for health care – and as business owners consider if their employee benefits should flow through the government-run marketplace – a new survey suggests that premiums for Affordable Care Act plans may increase rather substantially in 2016.
Premiums for health insurance offered through the federal exchange are expected to increase by an average of 12 percent next year, according to a recent study conducted by insurance information firm HealthPocket.
The report came to this projection after analyzing rate filings on more than 3,770 plans in 45 states. Premiums were then compared to what the average premium rate is for a 40-year-old non-smoking consumer in each state.
Silver plan rates may increase by 14 percent
There are four different types of plans that ACA health care policies come in: bronze, silver, gold or platinum. Silver, the most popular exchange plan type, will see rates average 14 percent more than what they were in 2015, the HealthPocket survey revealed. Nearly 67 percent of ACA plans are of the silver variety. Accounting for the largest increase, though, will be gold up 16 percent. Entry-level coverage – i.e. bronze – will see a 9 percent hike and platinum up 6 percent. Though platinum is the most expensive, it's also the one that has the most options for consumers to choose from, both in terms of doctors who are in-network as well as what medical treatments are covered.
Though this rate projection is just that – a forecast of how rates are expected to go in 2016 – this is the first time that ACA insurers have had a full year of medical claims with which to analyze plan costs that account for stipulations built within the health care law, HealthPocket noted. For example, one of the requirements of the ACA was that insurers could not use pre-existing conditions as a determination of who is and is not covered. Thus, now that more people are receiving treatment, which is often expensive, it's having an impact on prices.
Network confusion may lead to sticker shock
According to the Wall Street Journal, in a bid to keep health care costs down, insurers and employers that provide employee benefits to their workers are narrowing their networks, where there aren't as many health care offices covered by plans. Because of outdated information, patients may seek services from a hospital they believe to be in-network, only to find out later on when they get the bill that their health insurance didn't provide for it.
Anthony Wright, executive director of consumer advocacy coalition Health Access California, told the Wall Street Journal that this is a high-priority problem that consumers and businesses must address.
"This issue is becoming more urgent because you have more people covered under the ACA, and more of them are in the lower-income levels and can't afford financial surprises," Wright explained.
Narrow networks are the rule more often than the exception. Based on a report from McKinsey & Co. done earlier this year, roughly 50 percent of all ACA health exchange plans have a limited pool of hospitals from which to choose, WSJ reported. Additionally, as noted in a separate study conducted by the Kaiser Family Foundation, among companies with 50 workers or more – thus falling under the employer mandate that requires business to offer employee benefits to their workers – 8 percent are narrow networks.
Supreme Court ruling on King v. Burwell
Complicating matters further is the issue that the U.S. Supreme Court is ruling on. In the matter of King v. Burwell, the high court will soon render its ruling on whether the federal exchange at HealthCare.gov can provide subsidies to people who can't afford insurance. As the ACA was originally written, only state-based exchanges were permitted to provide subsidies.
"Given the possibility of subsidy loss on Healthcare.gov due to the King v. Burwell Supreme Court case, 2016 rate proposals are receiving considerable attention," said Kev Coleman, head of research and data at HealthPocket. "A principal concern is whether these rates are affordable in the potential absence of subsidies."
