In the five years since the Affordable Care Act became law, the health insurance community has seen an immediate and significant spike in premiums. The impact was expected, but just how reform has impacted premiums—and how long that impact will last—is up for debate.
A new microsimulation analysis of the 2015 health insurance offerings from the Heritage Foundation reveals that the high price trend of 2014 has not yet been reversed. The average health insurance premium on the ACA marketplace rose 5% this year—faster than the rate of inflation.
The premium increases have not been seen on all policies for all consumers, however. The burden of paying more for the same insurance policy has rested largely on young people. Healthy and less engrained in the labor force, young adults in Minnesota, for example, saw increases of 19.2% while middle-aged and sickly policyholders paid prices similar to last year.
Some states also saw larger health insurance increases than others.
Alaskans led the way, with a 24% increase in average one-month costs for buying family health insurance, following by Kansas and Louisiana (13.5%) and Tennessee (11%).
Still, the health insurance premium surge has moderated. The Heritage Foundation revealed that 2015’s 5% increase is dwarfed by the 50% increase non-group health insurance rates saw in 2014.
And some states even saw decreases. Families in New Hampshire paid an average 15% less for health insurance in 2015 compared to last year, and Missouri (-11%), Rhode Island (-2.01%), Arkansas (-2%), and North Dakota (-1.44%) also saw decreases.
The Heritage Foundation explains that because a majority of enrollees opted for lower-price plans last year, “the effect this year is that more enrollees experienced an increase in premiums than experienced a decrease in premiums.”
Researchers also said the 2014 spike in premiums—as well as the comedown in 2015—are not surprising for a market responding to disruptive changes.
“The real-world effect for most exchange consumers is that the prices they pay further increased in 2015, though not as dramatically as they did in 2014,” The Heritage Foundation concluded.
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