# eHealth says family health insurance premiums jumped 56% in 2014. **URL:** \ **Category:** Great Debates\ **Created:** [January 28, 2015, 12:21am UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064 "2015-01-28T00:21:57Z")\ **Posts on this page:** 15\ **Page:** 1
**Author:** ![Linden\_Arden](https://avatars.discourse-cdn.com/v4/letter/l/53a042/32.png) [@Linden\_Arden](https://boards.straightdope.com/u/Linden_Arden)\ **Post date:** [January 28, 2015, 12:21am UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064/1 "2015-01-28T00:21:57Z")
> [@](#): > > The most recent average premium for plans without a subsidy chosen by families was $663 per month, a 56% increase over the average family premium in February, 2013, which was $426 per month. > **[What’s the True Cost of Health Insurance under Obamacare? eHealth Launches...](https://news.ehealthinsurance.com/news/whats-the-true-cost-of-health-insurance-under-obamacare-ehealth-launches-first-national-health-insurance-price-index)** > > Premiums for 2014 individual plans currently averaging $274 per month; $663 per month for family coverage MOUNTAIN VIEW, CA - February 26, 2014 – eHealth, Inc. (NASDAQ: EHTH), which operates eHealthInsurance.com, the nation's first and largest... I find this difficult to believe. Is it correct? Is there a better study? ---
**Author:** ![treis](https://avatars.discourse-cdn.com/v4/letter/t/bc79bd/32.png) [@treis](https://boards.straightdope.com/u/treis)\ **Post date:** [January 28, 2015, 1:03am UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064/2 "2015-01-28T01:03:59Z")
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. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [January 28, 2015, 1:07am UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064/3 "2015-01-28T01:07:55Z")
Well, [here](http://www.factcheck.org/2014/03/obama-mixing-and-matching-insurance-stats/) is the FackCheck on the subject, FWIW: > [@](#): > > Premiums Before the ACA > > We’ll start with Obama’s claim that “the average premium was going up 15 percent a year before the Affordable Care Act.” > > Coming as it did in the middle of Obama’s answer to a question about the law’s effect on employer-sponsored plans, listeners could be forgiven for assuming the president was talking about premiums of employer-sponsored plans. > > Family premiums in the employer-based market increased about 4.8 percent per year on average in the five years prior to passage of the Affordable Care Act in March 2010, according to the nonpartisan Kaiser Family Foundation. Since the ACA passed, the annual increases have been 9.4 percent in 2011; 4.4 percent in 2012 and 3.8 percent in 2013. That’s an average of 5.9 percent. > > In fact, going all the way back to 2000, the increase in average annual family premiums never reached the 15 percent Obama cited, though it got nearly that high in 2002. > > The White House press office says, however, that Obama was referring to annual increases in the individual market prior to the ACA. And it’s true that the annual premium increase in the year before the ACA was 15 percent, according to the Kaiser Family Foundation. In 2010, the last year KFF surveyed people in the non-group or individual market regarding premiums, it found that people who bought their own insurance reported that “their insurers most recently requested premium increases averaging 20 percent.” > > The White House argued that since the marketplace exchanges are for people who don’t get coverage through work, it was valid for Obama to cite increases in premiums in the past in the individual market when talking about the impact on health care costs. > > It’s a figure that Obama has cited in the past. > > But in those cases, Obama was talking about the individual market, and he clearly noted that he was. In the WebMD interview, the question had nothing to do with the individual market. It was about the law’s impact on employer-sponsored plans. Obama never signaled that he was switching his response to the individual market. > > Moreover, in the next sentence, Obama went on to claim that “health care costs overall are actually going up more slowly over the last three years than in the last 50.” The White House directed us to data showing that per capita health care spending (see paragraph three) and health care expenditures, in general, are at historically low levels. And as we noted recently, the per capita cost of health care has dropped in recent years to the lowest three-year average in 50 years. Experts say the struggling economy is the main reason for the slowdown in health care spending, but some experts credit the ACA for part of the slowdown as well. > [@](#): > > Requirements for Employer Plans > > In fact, employer-sponsored premiums have gone up, on average, because of the ACA, though only by a small amount. Obama was correct to say that generally the law isn’t to blame for any “skyrocketing” employer-sponsored premiums. But he went a bit too far in saying that the only impact on employer plans was a requirement to offer a minimum set of benefits. The plans have faced more requirements than that. > > Again, Obama was asked if “Dan from Nevada,” who works for a “large corporation” and says his “insurance costs have skyrocketed,” was correct to blame that increase on the ACA. > > ``` > Obama: No, he’s not. A lot of people have looked at this and there’s nothing in the Affordable Care Act that would impact an employer sponsored plan, other than making sure the employer-sponsored plan is providing a certain basic level of coverage. > > ``` > > We don’t know the specifics of Dan’s situation — and neither did the president — but there’s no evidence that the ACA has caused premiums for large employer plans to skyrocket. And it’s true that the Affordable Care Act mainly affects the individual market, and, to a lesser extent, the small-group market. Large employers don’t face major, radical changes. > > But they do face new requirements, some of which have had a small impact on premiums. > > The law requires large employer plans to: > > ``` > Eliminate annual and lifetime caps on essential coverage > Provide coverage for dependents up to age 26 > Spend 85 percent of premiums on medical costs > Eliminate coverage exclusions for preexisting conditions > Cover preventive benefits without cost sharing > Have an external appeals process for policyholders with denied claims > > ``` > > Small-group plans (at companies with up to 50 workers, and up to 100 workers in 2016) face additional requirements that large employers don’t: They have to cover the law’s essential health benefits; they can’t rate polices based on health status or gender; and they face a state or federal review if premiums increase more than 10 percent. That’s all for non-grandfathered plans, which are the policies held by most workers. (Grandfathered plans only have to meet the first four conditions listed above. For more on grandfathered status, see our Jan. 3 article, “Workers ‘Losing’ Employer Plans?“) > > Several of the requirements for employer insurance were implemented early on. Many experts estimated that from 2010 to 2011, employer premiums went up 1 percent to 3 percent, on average, as plans had to allow adult children to stay on parents’ policies until age 26, cover preventive care without cost sharing, increase annual coverage limits and cover children regardless of preexisting conditions. > > The average family employer-sponsored premium jumped up by 9 percent that year, leading Republicans to claim that the ACA had caused the increase. But independent experts told us that the bulk of the change was due to rising medical costs, as usual. Drew Altman, CEO and president of the Kaiser Family Foundation, wrote at the time: “The two biggest changes this year allow young adults up to age 26 to stay on their parents’ insurance policies and require some insurance plans to cover preventive services at no cost to patients. These are popular provisions that provide real benefits, and combined they account for about one to two percentage points of this year’s premium increase.” > > Since 2011, premiums have risen at historically low rates. The next major change for some employer plans is the requirement to provide coverage for full-time employees. The Obama administration delayed that provision until 2015. Nearly all large companies with 200 or more workers offer insurance already — 99 percent of them, according to KFF’s 2013 employer survey — though the firms may not offer it to all employees. Fifty-seven percent of smaller firms, with three to 199 workers, offer insurance. > > Most Americans get their insurance through work, and the nonpartisan Congressional Budget Office estimates that that won’t change. It estimates that 158 million Americans will get insurance through their employer in 2018, 7 million fewer than if the law hadn’t passed. That’s a net decrease, which is a combination of some workers gaining coverage, some losing an offer of coverage and others choosing to not take the employer’s offer. ETA: Another article [here](http://www.factcheck.org/2010/11/the-truth-about-health-insurance-premiums/) from FactCheck…haven’t read this one yet though. ---
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [January 28, 2015, 2:07am UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064/4 "2015-01-28T02:07:13Z")
> [@Linden\_Arden](#): > > > [@](#): > > > > The most recent average premium for plans without a subsidy chosen by families was $663 per month, a 56% increase over the average family premium in February, 2013, which was $426 per month. > > [What’s the True Cost of Health Insurance under Obamacare? eHealth Launches First National Health Insurance Price Index | eHealth](http://news.ehealthinsurance.com/news/whats-the-true-cost-of-health-insurance-under-obamacare-ehealth-launches-first-national-health-insurance-price-index) > > I find this difficult to believe. > > Is it correct? Is there a better study? 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. > [@](#): > > The eHealth Price Index tracks consumer behavior over time, as a rolling 14-day average, providing data as early as October 15, 2013. Premiums for individual plans selected by eHealth customers on October 15 averaged $374 per month, but dropped approximately 27% to $274 by late February, 2014. This may be explained by demographic changes in the composition of shoppers over the period in question, and by shoppers choosing less expensive plans as the Open Enrollment Period progressed. The average age for individual applicants went from 44 years old in mid-October 2013 to 36 as of February 24, 2014. The average premium for family plans selected by eHealth customers went from $779 in mid-October 2013 to $663 on February 25, 2014. 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. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [January 28, 2015, 3:43am UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064/5 "2015-01-28T03:43:24Z")
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). ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [January 28, 2015, 3:17pm UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064/6 "2015-01-28T15:17:54Z")
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. ---
**Author:** ![Nelson\_Pike](https://avatars.discourse-cdn.com/v4/letter/n/c6cbf5/32.png) [@Nelson\_Pike](https://boards.straightdope.com/u/Nelson_Pike)\ **Post date:** [January 28, 2015, 4:03pm UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064/7 "2015-01-28T16:03:30Z")
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. ---
**Author:** ![GrumpyBunny](https://avatars.discourse-cdn.com/v4/letter/g/bc8723/32.png) [@GrumpyBunny](https://boards.straightdope.com/u/GrumpyBunny)\ **Post date:** [January 28, 2015, 4:40pm UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064/8 "2015-01-28T16:40:16Z")
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. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [January 28, 2015, 4:53pm UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064/9 "2015-01-28T16:53:32Z")
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. ---
**Author:** ![DinoR](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dinor/32/2821_2.png) [@DinoR](https://boards.straightdope.com/u/DinoR)\ **Post date:** [January 30, 2015, 1:31pm UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064/10 "2015-01-30T13:31:57Z")
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. ---
**Author:** ![eHealth](https://avatars.discourse-cdn.com/v4/letter/e/b9e5f3/32.png) [@eHealth](https://boards.straightdope.com/u/eHealth)\ **Post date:** [January 30, 2015, 8:25pm UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064/11 "2015-01-30T20:25:37Z")
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. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [February 3, 2015, 6:56pm UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064/12 "2015-02-03T18:56:01Z")
Are you an Official Spokesman for eHealth, um… **eHealth**? Author of the underlying report? Well-meaning employee? Random person on the Internet? ---
**Author:** ![iiandyiiii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/iiandyiiii/32/7924_2.png) [@iiandyiiii](https://boards.straightdope.com/u/iiandyiiii)\ **Post date:** [February 3, 2015, 6:59pm UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064/13 "2015-02-03T18:59:00Z")
> [@Really\_Not\_All\_That\_Bright](#): > > 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. ---
**Author:** ![storyguide3](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@storyguide3](https://boards.straightdope.com/u/storyguide3)\ **Post date:** [February 3, 2015, 7:48pm UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064/14 "2015-02-03T19:48:42Z")
> [@Really\_Not\_All\_That\_Bright](#): > > Are you an Official Spokesman for eHealth, um… **eHealth**? Author of the underlying report? Well-meaning employee? Random person on the Internet? 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. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [February 10, 2015, 5:57pm UTC](https://boards.straightdope.com/t/ehealth-says-family-health-insurance-premiums-jumped-56-in-2014/711064/15 "2015-02-10T17:57:19Z")
I assumed that too but the poster might have been a third party who ghostwrote the study or something else entirely.