Analysis of Individual Market Proposed Premium Filings Released for 2014

July 17, 2013

Findings:

Early empirical evidence does not support GOP and insurance industry claims of widespread "rate shock."
Because of variation in current state insurance regulations, results of the analysis vary by state. Effects of Affordable Care Act regulations on premiums will continue to vary by state as new rates are published.
In the decade before the Affordable Care Act became law, health insurance premiums increased by an average of approximately 10% annually. In 2010, people who purchased insurance in the individual market reported that their insurer had requested premium increases averaging 20%. [1]
The findings from preliminary rate filings in some of the states that have publically released information about their rates are summarized in the table below. [2] This table does not incorporate the effects of Affordable Care Act tax credits, which will substantially reduce the costs to more than 80% of consumers. For the most part, the table summarizes proposed rates, which are being reviewed by states currently; states frequently request reductions to initial rate filings.

State	Current Market Characteristics	Information on 2014 Exchange Rates
California	Though there are some regulations in place (especially among those who have spent two years in the state's high risk pool), insurers often deny coverage or base rates on pre-existing conditions in the individual market.	Second-lowest cost silver plan average: $325. Second-lowest cost bronze plan average: $234. Compared to comparable products in the small group market, 2014 rates range from 2% above 2013 premiums to 29% below 2013 premiums, despite improved benefits and financial protections.
Colorado	No guarantee issue or rating restriction.	"Colorado consumers will be pleased they will have enough health insurance plans from among which to choose, without being overwhelmed by too many choices – it looks like Goldilocks, just right," said Dede de Percin, executive director of the Colorado Consumer Health Initiative. "Despite doomsday predictions, the state is not seeing ‘rate shock', so many of the choices will be more affordable, especially with the subsidies." Silver Plans: Monthly premiums for a 40-year-old living in Denver from the majority of carriers will range from $245 to $357. Bronze Plans: Monthly premiums for a 40-year-old living in Denver from the majority of carriers will range from $186 to $299.
DC	No guarantee issue or rating restriction.	Silver Plans: For a 40 year-old -- $247 - $312. Bronze Plans: For a 40 year-old -- $166 - $269. Aetna lowered the rates it is proposing to charge HMO customers by more than 5%. United HealthCare reduced its proposed rates for policies sold to small businesses by 12%.
Maryland	No guarantee issue or rating restriction. Current regulations allow insurers to deny coverage for pre-existing conditions and allow rating based on gender, age, and health status.	One insurer is requesting a rate increase of 4.3%. Other insurers have requested larger increases, up to 25%, though even those requests have been reduced in response to competitiveness concerns. The state has not yet approved any proposed rate increases. Two new insurers are entering the market.
Montana	No guarantee issue or rating restriction.	According to State Auditor Monica Lindeen, "These preliminary figures show that rates haven't skyrocketed. Rates are actually lower than projections." For a 40-year-old: average monthly cost of the submitted policies is $273 a month. According to actuaries hired by Lindeen's office, without the Affordable Care Act, the same policies would have cost about $290 a month.
New Mexico	Within any age group, health status may be used to set premiums within a 250% composite rate band that also includes a maximum variation of 20% due to gender.	Silver Plans: For a 40-year old non-smoker -- $182 - $440. Catastrophic Plans: 27-year old, non-smoker -- $113 - 219.
New York	Guarantee issue state.	State insurance regulators say they have approved rates for 2014 that are at least 50% lower on average than those currently available in New York.
Oregon	Not guarantee issue, but current regulations include some limits on exclusion for pre-existing conditions and rate-setting.	Silver Plans: Consumers can save 7% on average if they stay in a comparable plan. Consumers can save 24% on average if they shop around. Bronze Plans Consumers can save 11% on average if they stay in a comparable plan. Consumers can save 32% on average if they shop around. Two insurers rapidly announced that they would reduce their rates when they saw the rates offered by their competition. Proposed premiums for a 40-year-old non-smoker range from $169 to $422 per month for plans with different levels of coverage.
Rhode Island	Very limited competition in the individual market, already have most Affordable Care Act reforms in place, including guarantee issue.	No net effect of Affordable Care Act on premiums.
Vermont	Very limited competition in the individual market, already have most Affordable Care Act reforms in place, including guarantee issue.	Rates comparable to current small employer plans, better benefits. Final average silver rates: $395 - $410.
Washington	Not guarantee issue, but current regulations include some limits on exclusion for pre-existing conditions and rate-setting. No requirement to cover RX drugs or maternity care, and many individual plans do not.	Silver Plans: Consumers can save 25% on average if they stay in a comparable plan. Consumers can save 36% on average if they shop around. Bronze Plans: Consumers can save 21% on average if they stay in a comparable plan. Consumers can save 33% on average if they shop around.

[1] https://kff.org/other/poll-finding/recent-premium-increases-imposed-by-insurers-averaged/

[2] The Affordable Care Act classifies insurance plans based upon the total percentage of an individual's health care costs they are expected to cover: bronze plans cover 60% of costs, silver plans cover 70%. There will also be gold plans, which cover 80% of health costs, and platinum plans, which cover 90%.