My must read of the day is "Obamacare plan premiums to decline on average in 16 cities," by Reuters:
Health insurance premiums for low-cost Obamacare plans in 16 U.S. cities will fall slightly in 2015 as competition helps drive down price for the new subsidized individual health plans, according to a study Friday from the Kaiser Family Foundation.
The Kaiser analysis found that the premiums for the second lowest cost "silver" tier plan, upon which government tax credit subsidies are based, will fall compared with 2014 prices by an average of 0.8 percent in 7 of 16 major cities.
If the trend holds across the country, the study said, the lower benchmark premium could mean that the government subsidies are less overall and there are more tax savings. […]
Including these tax credits, the average in the 16 cities would be a monthly premium of $208 versus $209 a year earlier, the study found.
Premiums for the lowest tier plan, bronze, are increasing an average of 3.3 percent in 2015, the study found.
The price of the "silver plan" is important because that’s what gets used to calculate the subsidy individuals are eligible for. This study is potentially good news for the government.
But the headline in this article, as well as others covering the study, is a bit misleading. Premiums for one particular plan are expected to decline, on average, in 16 cities. That’s not every plan, and it’s not every city or every state. Very few states have actually finalized their premiums.
Only five states (Oregon, Ohio, Montana, Maryland, and Rhode Island) have finalized them, and 29 states have submitted some degree of proposals.
From the current data on those 34 states, the Health Research Institute reports that premiums are expected to increase by an average of 7 percent (in HRI’s analysis that number changes based on incoming information). That is not the double-digit increase some were expecting premiums to rise every year, but premiums are different in every state.
In some states they will be lower; in some they will be higher—and we see that in HRI’s analysis.
In Oregon they’ll drop by 2.5 percent, but in Ohio they’re expected to increase by 12.1 percent. HRI’s data in Tennessee places the expected premium increase at 14 percent, the range being between 7.5 to 19 percent. Nearby in Mississippi the average premium is expected to increase by only 3.8 percent, with the increase ranging between 1.2 and 7.3 percent.
In Maryland, one particular plan from a large insurer will go up by 22.8 percent, according to an earlier report in the Wall Street Journal.
Like I said, not all states have released their rates and very few have finalized their proposals. Still, when it comes to premiums, it’s a mixed bag. What’s going to matter to people is not the nationwide average. What matters is what the cost is for them.
The political question is, will voters in states with higher—or even lower—premiums notice before the midterm election? Possibly not. Enrollment this year begins after the election on Nov. 15. Unless politicians start talking more about the premium estimates in their states, voters may not even notice a drop or an increase.