Lowest-Cost Exchange Premiums Remain Competitive in 2016; Consumers may be able to keep increases small by selecting a low-cost silver option

A new analysis from Avalere finds wide geographic variation in 2016 premium increases for individual market exchange plans, based on proposed rate filings in eight states where complete data is available.

Specifically, premiums for silver plans will increase 5.8 percent on average across the states analyzed, ranging from a 12.0 percent average increase in Oregon to a 5.3 percent decrease in Michigan. More than two-thirds (68 percent) of 2015 exchange enrollees picked silver plans. 

“While recent public attention has focused on a subset of plans that filed for premium increases of 10 percent or more, these data reveal that most plans are proposing more modest increases,” said Caroline Pearson, senior vice president at Avalere. “Notably, final premiums could be even lower than those proposed.” 

Based on proposed rates, average premium increases for low-cost silver tier plans are likely to be smaller than silver plans as a whole, if the states analyzed are representative of the broader market. 

Indeed, premiums for the lowest and second lowest cost silver plans in the eight states analyzed will increase on average 4.5 percent and 1.0 percent respectively, compared to a 5.8 percent across all silver exchange plans. Accessing these low cost plans may require enrollees to change carriers in some regions; however, the data suggest that low premium options may remain available for those consumers who are selecting plans based primarily on price. In 2014, two-thirds of consumers who chose a plan on the silver metal tier picked the lowest or second lowest cost option available.

“The good news for consumers in many states is that they may be able to keep premium increases low, depending on the plan they choose,” said Elizabeth Carpenter, director at Avalere. “However, low-cost plan options in 2016 may not be from the same insurers who offered these plans in 2015. In these markets, consumers will need to balance continuity of care with lower monthly premiums when comparing their health insurance options.”

Methodology 

Analysis includes final 2015 premiums and proposed 2016 premiums in Connecticut, the District of Columbia, Maryland, Michigan, Oregon, Vermont, Virginia, and Washington. States were selected based on rate filings available and accessible, through Department of Insurance websites or the System for Electronic Rate and Form Filing (SERFF), as of May 29, 2015. For purposes of this analysis, average premiums are not weighted by exchange enrollment in a given rating region or state. 2015 premium data for federally-facilitated exchange (FFE) states based on the 2015 HHS Individual Market Landscape file, updated as of November 2014. 2015 premium data for state-based exchange (SBE) states based on the "Health Insurance Exchange (HIX) Compare" file published by the Robert Wood Johnson Foundation (RWJF), updated as of February 2015. 2016 proposed premiums were collected via rate filings that were publicly available as of May 29, 2015. All premiums are for an individual, 50-year-old non-smoker. Proposed 2016 rate filings are currently under state review; therefore, final rates may change.