While the majority of prognostications about the Patient Protection and Affordable Care Act forecast that employee benefit costs and individual premiums will likely rise in 2014, a new study suggests that these predictions are exaggerated.
According to the report, which was performed by the nonprofit research group RAND Corporation, because there are so many factors that play into determining premiums from person to person – such as if they smoke, how old they are and if they're eligible for subsidies – sweeping generalizations can't be made. And of those that have, most have been overstated.
"Once we adjust for age, actuarial value and tobacco use, nongroup premiums are estimated to remain unchanged at the national level in many states," the report found. "Further, after accounting for tax credits, average out-of-pocket premium spending in the nongroup market is estimated to decline or remain unchanged in all states considered and in the nation overall."
In order to come to their conclusions, 10 states were analyzed: Florida, Kansas, Louisiana, Minnesota, New Mexico, North Dakota, Ohio, Pennsylvania, South Carolina and Texas.
Christine Ebner, the study's lead author and senior economist at RAND, said that while some states will experiences higher premiums, others will see them decrease.
"But our analysis found no widespread trend toward sharply higher prices in the individual market," said Ebner.
Something else that could have an impact on the way in which premiums trend is whether states decide to expand Medicaid. If legislatures opt to keep it in its present form, more people will be forced to buy health coverage, which could cause rates to rise between 8 and 10 percent for states like Texas, Louisiana and Florida.
The nonpartisan Congressional Budget Office and Society of Actuaries are two organizations that have found insurance rates will likely rise under the ACA.
