Premiums for ACA Insurance Plans Will Decline Slightly in 2015

In the largest cities in 15 states plus the District of Columbia the average insurance premiums for the second-lowest-cost silver plan will decline by 0.8% in 2015, according to an analysis from the Kaiser Family Foundation.

Although they are set decrease on average, premium changes across the 16 areas analyzed will vary widely. In Denver premiums will decrease by 15.6% to $211 a month for a 40-year-old smoker with no tax credit, but in Nashville the same individual’s premiums will increase 8.7% to $205 a month, according to the research.

Taking into account tax credits, Kaiser found the subsidies will protect eligible individuals from any premium increases. In nearly all of the cities, even those with premium increases before tax credits, a single, 40-year-old with an income of $30,000 enrolling in the second-lowest-cost silver plan would pay 0.8% less in 2015.

“There is variation, but so far, premium increases in year 2 of the Affordable Care Act are generally modest,” Drew Altman, Kaiser’s president and chief executive officer, said in a statement. “Double-digit premium increases in this market were not uncommon in the past.”

The cities analyzed are: Baltimore, Maryland; Burlington, Vermont; Cleveland, Ohio; Denver, Colorado; Detroit, Michigan; Hartford, Connecticut; Las Vegas, Nevada; Los Angeles, California, Nashville, Tennessee; New York City, New York; Portland, Maine; Portland, Oregon; Providence, Rhode Island; Richmond, Virginia; Seattle, Washington; and Washington, DC.

The second-lowest silver plan is watched particularly closely because it is the benchmark on which federal financial help for consumers is based. Lower premiums for this plan means the federal government pays out less tax credit subsidies, which, in turn, translates to savings for taxpayers.

According to Kaiser, consumers receiving federal financial help will need to pay close attention to the plan they choose in 2015.

“In 12 of the 16 cities, at least one of the insurers that had offered one of the two lowest-cost silver plans in 2014 is no longer offering a low-cost silver plan in 2015,” authors Cynthia Cox, Larry Levitt, Gary Claxton, Rosa Ma, and Robin Duddy-Tenbrunsel wrote in the report.

People who simply re-enroll in the same plans may not realize they are no longer among the lowest costing. As a result, these consumers will be responsible for paying the difference between the plan they choose and the silver plan with the second-lowest cost.

“Consumers should go into the open enrollment period prepared to shop for the best deal all over again,” Levitt, Kaiser senior vice president and co-executive director of the Foundation’s Program for the Study of Health Reform and Private Insurance, said in a statement “You could end up paying more if your insurer is no longer offering one of the low-cost plans, so you should look carefully at your options.”