I find this difficult to believe.
Is it correct? Is there a better study?
That’s just for plans purchased through that specific private health exchange. Essentially, the study says something changed about eHealthInsurance’s client base, and not anything about the broader health insurance market.
Well, here is the FackCheck on the subject, FWIW:
ETA: Another article here from FactCheck…haven’t read this one yet though.
Did you notice that the press release is almost a year old - February 26, 2014? It begins by comparing average prices in Feb 2013, when cheap, low coverage policies could still be purchased. Then it goes on to compare Obamacare compliant policies during the enrollment period.
To me, it is not a very impressive study because it just compares eHealth customers, not the broader demographic of all insured individuals and families - and it does this during a massive shift in the Health Insurance market.
Medical costs only grew by 3.6% in 2013. I don’t know how/why insurance premium inflation are so decoupled from health care cost inflation. Why does insurance go up by 20-30% when it is used to pay for services that only increased in price by 3%?
Was it because various consumer protections came into play in 2014 (mandatory max deductibles and out of pocket max, stuff like that).
Kind of. But it’s more because insurers didn’t know exactly how all those mandates would affect their bottom lines because they weren’t sure how to model some of the cost changes. I thought that’s what the whole profession of actuarial science was about, but there you go. It’s also fair to say that every premium set for 2014 was somewhat speculative because there was always a chance that the White House would suspend certain provisions or that Congress would repeal them.*
Premiums should go down slightly over the next few years once insurers have real world numbers to work from.
*My wife is an executive for an HR outsourcing firm and some of the brokers she works with had no price quotes for coverage in the small employer market as late as October 2013.
This is a topic that could use input from a professional underwriter.
Per Wiki total monthly health expenditure per capita in the USA is about $700, so if a family of four is paying less than a quarter of that per person in premiums, then they might not be getting a bad deal deal.
On the other hand, a young family of four is not going to be nearly as high a risk as four unattached individuals pushing 65, and that is where the underwriting comes in- to determine how much of a difference charge in premiums is justified.
In 2010, at age 61, I was paying $519 monthly (smokers rate, although I quit a year earlier) for a policy with the standard deductibles and copayments. Then they wanted to jack it up to over $700 per month, so I switched to a $339 policy policy with a $5,000 yearly deductible.
I’d also love to hear from a professional underwriter.
Most businesses in the US that offer insurance are self-insured, meaning the employer covers the cost of medical claims. So, the insurance company processes the claims under the insurance plan, and the employer actually pays the costs incurred.
If that’s the case, why *do *insurance premiums go up every year? You can’t tell me it takes an extra 10% for the insurance company to process the claims…every year.
Most large employers are self-insured. Small employers are very rarely self-insuring for employee health plans (~15%). Employees of large employers are an absolute majority, so about 60% of employees are under self-insured plans, but there are many more small employers than large ones.
I was at a small company that nominally self-insured. They also held a major medical policy that provided all the coverage past a certain amount of expenditures in a year. It would be interesting to know what percentage of large employers follow a similar scheme. They have less reason (one major health issue could have killed the small company I was at without the major medical coverage.) Still there might be a reason to followa similar structure that accepts the risk for most in order to get the savings but insures against the biggest of losses.
As at least one commenter has noted, the data we published in the cited press release compares the cost of individual and family health insurance plans purchased prior to the full implementation of the Affordable Care Act with the cost of ACA-compliant health insurance plans. Though year-over-year differences of average premiums between 2014 ACA-compliant plans and 2015 ACA-compliant plans are significantly smaller, there was a large increase in costs between 2013 and 2014 plans due, in part, to the improved benefits mandated for 2014 plans compared to pre-2014 plans and the enactment of “guaranteed issue” rules, prohibiting insurers from declining applicants (or rating them up) due to their personal medical history.
It should also be noted that the data we published is based 1) on plans actually selected by consumers rather than plans available for consumers, 2) on consumers who shopped at eHealth only, 3) on individually-purchased plans rather than on employer-based plans. eHealth operates the largest private online health insurance marketplace with the largest inventory of off-exchange plans nationwide, so our data provides a good snapshot of the market for people not enrolling in subsidized health plans through government marketplaces.
Are you an Official Spokesman for eHealth, um… eHealth? Author of the underlying report? Well-meaning employee? Random person on the Internet?
I’m sure the screen name is just a coincidence.
Given that they used “we” and “our” in reference to the data, I am going to go out on a limb and say that they work for eHealth.
I assumed that too but the poster might have been a third party who ghostwrote the study or something else entirely.