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Kaiser Family Foundation: Avg. 2016 rate increase may not be so bad at all...with major caveats

The Kaiser Family Foundation has posted their latest Analysis of 2016 Premium Changes and Insurer Participation in the Affordable Care Act’s Health Insurance Marketplaces.

The main paragraph which leaps out, of course, is this one:

Across the 11 cities we examined, the premium for the second-lowest-cost silver plan in the Marketplace – before accounting for any tax credit – is increasing by an average of 4.4%. By contrast, in these cities, the average change in the benchmark silver plan was -0.6% from 2014 to 2015. (The nationwide average increase in this plan was 2% from 2014 to 2015).

This is certainly good news. HOWEVER, as I've stressed many, many, many times, this is very much limited data:

  • It only covers 11 cities, and therefore only a fraction of the population of 11 states
  • It only covers the benchmark Silver plans in those cities (68% of ACA exchange enrollees went with some version of a Silver plan)
  • Some of these rates could easily change--either being lowered or raised--by the time they're actually approved for 2016
  • And, as always, an adverse King v. Burwell ruling could blow all of these numbers to hell anyway.

Count the disclaimers & caveats in these two paragraphs alone before jumping to any conclusion:

This brief presents an early analysis of changes in the premiums for the lowest- and second-lowest cost silver marketplace plans in major cities in 10 states plus the District of Columbia, where we were able to find complete data on rates for all insurers. It follows a similar approach to our September 2013 and 2014 analyses of Marketplace premiums.

In most of these 11 major cities, we find that the costs for the lowest and second-lowest cost silver plans – where the bulk of enrollees tend to migrate – are changing relatively modestly in 2016, although increases are generally bigger than in 2015. The cost of a benchmark silver plan in these cities is on average 4.4% higher in 2016 than in 2015. These premiums are still preliminary in some cases and could be raised or lowered through these states’ rate review processes, and it is difficult to generalize to all states based on this small sample of states where all rate filings are available. We also find that the number of insurers participating has stayed the same or increased in 9 states, while insurer participation decreased in Michigan and the District of Columbia.

Still, this serves, once again, to prove that caution is recommended before either freaking out over "OMG MASSIVE RATE HIKES!!" or "Hah! See? All that fuss over nothing!" reactions.

The most important factor in keeping rates low for private ACA exchange enrollees is also noted by KFF:

This underscores the importance of enrollees actively shopping each open enrollment period. For example, in Seattle, Washington, Bridgespan offered the second-lowest-cost silver plan in 2015 at a premium of $254 per month for a single 40 year-old before taking a tax credit into account. Bridgespan is increasing this plan’s rate to $286 per month for 2016, but another insurer (Ambetter) is undercutting it and offering two lower-cost silver options for $225 and $228 per month. An unsubsidized person enrolled in the 2015 second-lowest silver plan offered by Bridgespan would see a 12.6% increase if she stayed in the same plan. Conversely, if she switched to the new second-lowest silver plan offered by Ambetter, her premium would drop -10.1% (before accounting for the relatively small effect aging up a year would have on her premiums).

Once again: DO NOT BLINDLY AUTORENEW. Visit Healthcare.Gov or your state-based exchange website this November and shop around before renewing with the same policy. You may end up doing so (as my wife and I did this year), but at least actively check things out beforehand. You may find that you can save a lot by making a switch to a different plan or even a different insurance provider.