New report finds premiums in the Health Insurance Marketplace will be nearly 20 percent lower in 2014 than previously expected


Posted by AzBlueMeanie:

The Department of Health and Human Services (HHS) released a report on Thursday that analyzes the 2014 premiums in
the Obamacare insurance marketplaces in 11 different states, including
Virginia, Colorado, Ohio, and Oregon. Surprise! New report finds competition lowers premiums by nearly 20 percent in the Health Insurance Marketplace:

New report finds competition lowers premiums by nearly 20 percent in the Health Insurance Marketplace

Affordable Care Act gives consumers access to better coverage at a greater value in 2014

Secretary Kathleen Sebelius today released a new report that finds
premiums in the Health Insurance Marketplace will be nearly 20 percent
lower in 2014 than previously expected.

The Affordable Care Act
requires health insurers in every state to publicly justify any premium
rate increases of 10 percent or more.  Health insurance companies now
generally have to spend at least 80 cents of every premium dollar on
health care or improvements to care, or provide a rebate to their policy
holders.  In addition, when the Health Insurance Marketplace opens for
enrollment on October 1, 2013 consumers will be able to make apples to
apples comparisons of quality health insurance plans.

report shows that the Affordable Care Act is working to increase
transparency and competition among health insurance plans and drive
premiums down,” said Secretary Sebelius.  “The reforms in the health
care law ensure consumers will have access to better coverage at a lower
cost in 2014.”

Specifically the report finds that:

  • In
    the 11 states (including the District of Columbia) that have made
    information available for the individual market, proposed premiums for
    2014 are on average 18 percent lower than HHS’ estimate of 2014
    individual market premiums derived from CBO publications.
  • In
    the six states that have made information available in the small group
    market, proposed premiums are estimated to be on average 18 percent
    lower than the premium a small employer would pay for similar coverage
    without the Affordable Care Act.
  • Both estimates are
    based on premium proposals for the lowest cost silver plan in the
    individual and small group markets.  Actual premiums in 2014 may be even
    lower when health plans are offered in the Marketplace this fall. 
    Already, in a number of states (DC, OR, RI, VT), the rate review process
    and competition are resulting in final rates that are significantly
    below what was proposed earlier this spring.
  • Preliminary
    premiums appear to be affordable even for young men. For example, in
    Los Angeles – the county with the largest number of uninsured Americans
    in the nation – the lowest cost silver plan in 2014 for a 25-year-old
    individual costs $174 per month without a tax credit, $34 per month for
    an individual whose income is $17,235, and a catastrophic plan can be
    purchased for $117 per month for an individual.

data from the Medical Expenditure Panel Survey Insurance Component shows
that the average premiums for employer sponsored insurance increased by
only 3 percent from 2011 to 2012, the lowest rate of increase observed
since the data series started in 1996.

Already the 80/20 rule, or
medical loss ratio, has saved 77.8 million consumers $3.4 billion up
front on their premiums as insurance companies operated more efficiently
and spent more on health care than administrative expenses, and 8.5
million consumers can expect an average rebate of approximately $100 per
family.  Since the health law’s rate review provisions were
implemented, the number of requests for insurance premium increases of
10 percent or more has dropped dramatically, from 75 percent to 14
percent.  To date, the rate review program has helped save Americans an
estimated $1 billion.

The report is available at:

to learn more about the Health Insurance Marketplace.  Open enrollment
begins on October 1, 2013 for coverage starting as early as January


UPDATE: Think Progress adds, Obama Administration: Premiums Under Obamacare Will Be Even Lower Than Originally Predicted:

The new data comes on the heels of Wednesday’s news that New Yorkers’ premiums will be significantly lower under the health law. Insurers in Oregon, Montana, Louisiana, and California have also already announced marketplace rates that are lower than expected
and offer more robust benefits than current policies. And many
Americans will actually be able to buy insurance for even lower prices
than those top line numbers, thanks to insurance subsidies provided by
the federal government.

Flanked by Americans who have personally benefited from the
Affordable Care Act through insurance rebates and lower premiums,
President Barack Obama will emphasize the tangible effects of his
signature health care law in a speech on Thursday.

Obama will also cite government data showing that millions of
Americans have received rebates from their insurance companies due to
Obamacare’s “medical loss ratio” provision (also known as the “80/20
rule”), which requires insurers in the individual market to spend at
least 80 percent of the premiums they charge on actual medical care
rather than profits or overhead. By the administration’s estimates, 8.5
million Americans have received an average rebate of $100 thanks to the
rule, and consumers have also seen $3.4 billion in upfront savings as
insurance companies lower their premiums in an effort to comply with the

That’s consistent with earlier independent analyses by organizations like the Kaiser Family Foundation (KFF), which found
that in 2012, Americans who bought individual health plans saved
approximately $2.1 billion thanks to the law. The number includes $1.9
billion in lower 2012 premiums and another $200 million worth of rebate
checks — which could be as high as $500 in certain insurance markets
where companies tend to gouge prices.

Administration officials hope to use the numbers, and the image of
actual Americans who have benefited from the health care law, as a
counterargument to what they see as a debate that has been largely
conceptual up until now.

UPDATE: Paul Krugman | Obamacare Is the Right’s Worst Nightmare.

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AZ BlueMeanie
The Blue Meanie is an Arizona citizen who wishes, for professional reasons, to remain anonymous when blogging about politics. Armed with a deep knowledge of the law, politics and public policy, as well as pen filled with all the colors stolen from Pepperland, the Blue Meanie’s mission is to pursue and prosecute the hypocrites, liars, and fools of politics and the media – which, in practical terms, is nearly all of them. Don’t even try to unmask him or he’ll seal you in a music-proof bubble and rendition you to Pepperland for a good face-stomping. Read blog posts by the infamous and prolific AZ Blue Meanie here.