The monthly health premium is a source of consternation for consumers, who for years have watched insurance prices grow faster than inflation. It’s an especially big concern in the Obamacare marketplaces, where many low-income people without access to employer-sponsored coverage are buying subsidized plans.
Obamacare premiums grew faster this year than many had hoped, raising questions among policy experts and lawmakers of whether enough healthy people are signing up and whether enough insurers are competing to push prices downward.
In two new studies published in Health Affairs this month, researchers found that inducing more insurer participation into the marketplaces and getting more people to sign up is important for keeping premiums low. But those are two goals that may be hard to achieve next year.
Analysts at the Congressional Budget Office found an association between one more insurer selling plans on the marketplaces and a 1.2-percent lower premium for the average mid-level “silver” plan sold in federal-run marketplaces. The addition of just one insurer was also associated with a 3.5 percent lower premium for the benchmark plan in the marketplaces.
Researchers didn’t find statistically significant associations in the state-run marketplaces, although that could be because there was a much smaller increase in competition between 2014 and 2015 than in the federal-run marketplaces.
The findings could bode poorly for prices in the next enrollment year, if insurer UnitedHealthcare follows through on its threat to exit the marketplaces and if other insurers follow suit.
A second study, conducted by University of Chicago researchers, also underscored potentially mounting difficulties for the Obamacare marketplaces next year. They found that shoppers chose plans largely based on price, with the two lowest-cost plans in each price tier accounting for 64 percent of enrollment.
The good news for consumers was that between the first and second years of Obamacare, premiums increased by a relatively modest 4 percent. But the researchers warned that with extra federal payments to insurers stopping after 2016, premiums could rise much faster, as they did this year. And that could make plans less attractive.
“This trend of low premium increases overall is unlikely to continue … as insurers are faced with mounting medical claims,” they wrote.
Conservatives propose latest Obamacare replacement
In the wake of the Senate’s vote this month to repeal Obamacare, a group of leading conservative healthcare thinkers has released a set of proposals they would like to see it replaced with.
Many of the ideas look similar to the proposal put forth in October by Jeb Bush, who is the only competitive Republican presidential candidate to have released a relatively detailed healthcare plan.
After repealing the Affordable Care Act, the plan, which was presented via the conservative think tank American Enterprise Institute, would provide refundable tax credits to those without employer-sponsored coverage to buy plans on their own.
It would remove Obamacare’s benefit requirements from insurers, but they still would still be required to cover Americans with pre-existing conditions as long as those patients had not gone more than three months without coverage. And it would expand the ability of Americans to pay for health expenses using tax-free health savings accounts.
But the authors proposed a much more detailed plan for Medicaid reform than any of the candidates have laid out. They want to split the federal health insurance program for low-income people into two parts, one for able-bodied adults and their children and the other for the disabled and elderly.
Instead of covering a set percentage of all of a state’s Medicaid spending, typically about 60 percent, the federal government instead would base payments on historical spending patterns for the two population groups.
Rep. Tom Price, who has released a proposal to replace the Affordable Care Act, is backing the plan released by the American Enterprise Institute and written by well-known policy wonks on the Right including Lanhee Chen, Yuval Levin, James Capretta and Avik Roy.
