By almost any standard, health coverage costs for working families are too high and rising unsustainably. Despite the Affordable Care Act’s (ACA) intrusive efforts to regulate health insurance, premiums and deductibles for workers both in and outside the ACA’s health exchanges have continued to rise nearly four times faster than wages. Recent reports show that, even with substantial financial assistance and new marketplace protections, many ACA exchange enrollees are devoting 25 percent or more of their incomes to health costs while one in five individuals with qualified health plans still cannot afford their out-of-pocket medical bills.
CAHC examined plan offerings—including number of plans offered and premiums available—on HealthCare.gov, the federal exchange used in the 39 states that do not operate their own health exchanges. CAHC analyzed the premiums before application of any tax credits for the second lowest cost silver plan—the benchmark plans used to calculate subsidies—for a 27-year-old, by state in each year from 2014 to 2017.
We also analyzed average national premiums for a 40-year-old and average national deductibles for Silver plans on HealthCare.gov for these years. Silver plans are the most popular exchange plans, and individuals aged 35 to 54 represent the largest age cohort enrolled in exchange plans.4 We believe displaying information for average deductibles and premiums facing 40-year-olds enrolling in Silver plans provides a general picture of a typical enrollee’s coverage. CAHC did not examine premiums or deductibles available on the state-based exchanges, nor did we look at national average premiums for other age cohorts.
Over the 2014-2017 window, we found significant average growth in premiums and cost sharing and a general reduction issuer in between choices. CAHC’s previous research shows a major reason for this trend is that risk pools are seriously unbalanced, with older and sicker enrollees. Our findings show that the individual market is currently struggling and rapidly deteriorating. We speculate that in many markets, these pools are in or headed towards a death spiral, but could be saved by intervention to reduce risk and relief from the crushing mandates, restrictions, and rules imposed by current law.
In the final section, we outline a series of proposals designed to stabilize individual insurance markets and reduce pressures on cost growth.Download the Brief
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