(Update) ‘ObamaCare’ rate shock talking point debunked

Earlier this month I posted about the recent studies in which ‘ObamaCare’ rate shock talking point debunked.

The insurance exchanges have been up and operating since Saturday, with a new anonymous “window shopping” feature that lets consumers comparison shop plans for price and coverage features without first having to submit an application questionnaire.

The news continues to be good. Margo Sanger Katz writes at The Upshot for the New York Times, First Look at Health Insurance Rates for Next Year Is Encouraging:

Early evidence suggests that competition in the new Affordable Care Act marketplaces is working, at least in some areas. Health insurance premiums in major cities around the country are barely rising.

That’s the conclusion of two studies of data about newly public insurance rates. One, from the Kaiser Family Foundation, a health research group, looked at 49 cities and found that prices for a popular type of plan are actually going down, on average. A second, from the actuarial firm Wakely Consulting Group, looked at the largest county in each of the 34 states with marketplaces run by the federal government and found an average rate decrease of one percent.

Decreases in the price of health insurance are basically unheard-of. The individual insurance market that these new marketplaces replaced experienced annual increases of 10 percent in recent years. In the employer market, premiums went up by a record-low rate of 3 percent this year, but even that increase can’t compare with what’s happening in many exchange markets.

“Usually, health insurance premiums have gone in one direction, and that is up,” said Cynthia Cox, a senior analyst at Kaiser who was a co-author on its paper. She said that the widespread premium decreases really stood out when she ran the numbers.

The studies suggest that, in large cities, at least, the new health insurance marketplaces are working as intended: Health insurers, competing for business, are keeping prices low. That’s great news for the federal budget, since the government is paying subsidies to help some 85 percent of people on the market pay their bills. It’s also good for consumers who will be coming to the market for the first time during open enrollment, which begins Saturday.

But just because the type of plan that the researchers examined — the second-cheapest plan in the “silver” category — is showing modest changes, that doesn’t mean that every plan is a great deal. The Wakely analysis highlighted that many of the most popular plans from 2014 are getting much more expensive, while many of the cheapest plans will be new to the market in 2015. That means that consumers who simply renew their plans without shopping could get stuck with a substantial increase.

In September, my colleague Amanda Cox and I looked at rates that were published early and found a similar pattern outside large cities. For an interactive map of the early rate data and a detailed explanation of the trade-offs between shopping and saving, read our article. (We’ll be updating it soon with the new prices.)

History suggests that a lot of people will avoid shopping again and simply renew their old plans. That will be a mistake. Some will miss out on savings. Others may face miscalculations of their federal subsidies and a surprise bill come tax time. “Consumer beware,” said Jon Kingsdale, a director at Wakely, and a co-author on its paper.

In the earlier post I warned you, “The conservative media entertainment complex will cherry pick plans with double digit rate increases, which vary by the type of plan and provider, by state and region, and whether it is in a state run exchange or a federal run exchange. They will then purposefully mislead by arguing  that the cherry picked plans are representative of all plans, rather than use the median.”

The Washington Post reports that the ACA’s price hikes are no different than recent trends in premiums for employer-sponsored health plans. Obamacare Premiums Are Going Up…at the Same Rate as Everybody Else’s:

Americans want to know if these plans are affordable, and whether the ACA is slowing the growth of the cost of health care in the United States. To look at the early reviews, [you would think] the news isn’t good.  “Cost of Coverage Under Affordable Care Act to Increase in 2015,” was the headline on a front-page New York Times article on Saturday.  A Washington Post analysis determined that HealthCare.gov users will have more choices than last year, “but the options usually will be costlier.” Stories from other news outlets highlighting ACA’s higher costs include those found here and here.

Not surprisingly, Republican critics of the ACA have seized upon these reports as more evidence of its disappointments. “This year, many who like their plan will likely have to pay more to keep it,” said Sen. Orrin G. Hatch (R-Utah).

All of these conclusions are accurate. The estimates are fuzzy, but the consensus is that premiums will be rising across the country for the typical marketplace customer. Based upon data released last week by the U.S. Department of Health and Human Services, the Kaiser Family Foundation estimates that premiums will increase in the average county by 2 percent (for mid-range plans in the “silver” category) to 4 percent (for lower-cost “bronze” plans).  In its analysis of the same data, the New York Times determined that silver plan premiums would rise 4 to 5 percent. Widely reported estimates by the Avalere Health consulting firm similarly found premiums rising 3 to 4 percent.

So yes, ACA premiums are rising. But most reporting on these numbers has lacked a critical bit of historical context. These price increases are no higher than recent premium increases on plans provided to Americans by their employers.

Since 1999, the Kaiser Family Foundation has interviewed a nationally representative sample of employers about the health insurance they offer. The graph above displays changes in the average annual premiums paid for single and family coverage since 2000. Before 2007, increases were at least 5 percent per year. Since then, premiums have been rising more slowly, with the median increase at about 4 percent per year.  Shown alongside these figures is the range of estimates published over the past few days on expected premium increases on plans in the ACA marketplaces. They’re no different from recent trends in premiums for employer-sponsored plans.

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In sum, the ACA marketplaces feature competition, they require comparison shopping and — if these estimates hold — their plans’ premiums are rising at the same rate as those offered elsewhere. So far, HealthCare.gov’s second act looks an awful lot like that of the rest of the health insurance market.

Here in Arizona the AP reports, United Healthcare jumping into Arizona health exchange:

As the next open enrollment period under President Obama’s health-care overhaul begins, the nation’s largest health insurance provider is jumping into the Arizona marketplace, and residents should see lower prices than during last year’s glitch-ridden rollout.

United Healthcare is one of three new companies entering the Arizona market, bringing to 13 the number of companies offering individual insurance plans in the state through the federal marketplace healthcare.gov website. The other two new companies are Assurant Health and Phoenix Health Plans, formerly Abrazo Health Plans.

United was cautious about jumping into the individual marketplace in the first year, deciding to offer plans in only four states. Now, it will sell policies in 23 states, including Arizona, said Laura English, United Healthcare’s vice president for exchange plans in Arizona.

“We waited, we watched, we learned somewhat what our customers needed and to be able to price the plans so that we could provide quality coverage at prices consumers could afford,” English said. The company already runs Medicaid, Medicare, small business and group policies in the state, she added.

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In Arizona, a coalition known as Covered Arizona is overseeing outreach efforts to help consumer navigate the applications and choose a plan. Those needing assistance can go to the group’s website (http://coveraz.org) and make an appointment with a certified health-care navigator. Calling 211 also connects people with someone who can make an appointment.

“One of the things that was a missing piece last year was the ability to get people directly connected with enrollment quickly,” said Jon Ford, communications director with St. Luke’s Health Initiatives. “Now, we can very quickly with a ZIP code figure out what the nearest location is for that person and literally schedule the appointment. And that triggers a follow-up email and a reminder text message to help those folks get to that appointment.”

Consumers who are updating their coverage or buying it for the first time will also see less sticker shock this year. A comparison of plans done by the Kaiser Family Foundation shows that the price of a sample plan premium for a silver-level plan in Phoenix is going down by 10 percent this year. A 40-year-old nonsmoker who chooses the lowest-cost silver plan will pay $177 a month for coverage in 2015, compared with $197 this year.

Those who bought plans during the last open-enrollment period are being encouraged to update their applications before Dec. 15 and can change plans though Feb. 15. That’s important because the plans on which subsidies are based have changed, and that may affect premiums in the seven Arizona rate categories.

Remember, the premium is reduced by the tax subsidy based upon your qualifying income. The “sticker price” in almost all cases is not what you will actually pay.