Market Competition Works: Proposed Silver Premiums in the 2014 Individual and Small Group Markets Are Nearly 20% Lower than Expected.

摘要

A goal of the Affordable Care Act is to increase competition and transparency in the markets for individual and small group insurance, leading to higher quality, more affordable products. To date, this proposition has largely been based on theory. The early market reforms, such as requirements for a minimum Medical Loss Ratio and for review of proposed rate increases of 10% or greater, have clearly created value for consumers. Further, data from the Medical Expenditure Panel Survey Insurance Component (MEPS-IC) shows that the average premiums for employer sponsored insurance increased by only 3% from 2011 to 2012, the lowest rate of increase observed since the data series started in 1996. However, the major changes in the rules for individual and small group insurance will begin in plan year 2014. Information on proposed premiums in the individual and small group markets has recently been made available by selected states, and it is now possible to move from theoretical arguments to data-driven analysis. This research brief analyzes proposed rates in the individual market for 2014 in the eleven states that have made information available, and compares these rates to those estimated by the Congressional Budget Office (CBO).