What's the prognosis for health insurance rates?
What's the prognosis for health insurance rates? iStockphoto.com
With new health insurance exchanges set to launch in just over a month, there's been a lot of chatter about how shocking the rates might be.
One possibility is that adding sick people to a more comprehensive benefits package will cause premiums to soar. Last spring, the Society of Actuaries predicted an average increase of 32 percent in health claims costs because of the law, which prompted an outcry from opponents of the law.
But an analysis just out from the RAND Corp. reaches a very different conclusion.
Looking at 10 representative states in the year 2016, RAND found that premiums in the individual market would likely rise in three of them (Minnesota, North Dakota and Ohio). In two others (Louisiana and New Mexico) premiums could actually go down compared to what would happen in the absence of the Affordable Care Act.
And for the other five states (Florida, Kansas, Pennsylvania, South Carolina and Texas), and the nation as a whole, RAND's analysis found "the law causes no change in premiums."
The researchers also found a dramatic increase in the number of people who would likely get health insurance. The percentage of people in the individual insurance market is likely to double — from 4.3 percent of those under 65 now to 9.5 percent in 2016. Overall, the uninsurance rate could drop to 8.2 percent from 19.6 percent, assuming all states opt to expand their Medicaid programs.
But not all the news was good for the Department of Health and Human Services, which commissioned the study.
The study found small increases in coverage are likely in the small group market, and minimal differences in premiums, with and without the law. But one of the law's major goals was to provide small businesses lower premiums by giving them better bargaining power.
Overall, the study's authors caution that predicting premiums is a risky business, "because the law introduces complex changes and because of limitations of existing data and uncertainties about insurer behavior."
They do, however, suggest that "comparisons of average premiums with and without the Affordable Care Act may overstate the potential for premium increases."
And the full array of premiums for 2014 won't be public until sometime next month, when federal officials release them.