As the federal health insurance exchange launches its open enrollment period, the New York Times reports that the private insurers participating in the exchange may be jacking up their rates by as much as 20%. Policyholders wanting to keep their premiums down will have spend their valuable time shopping around, comparing deductibles, benefits, and provider networks. And this differs from the pre-Affordable Care Act system how?
NYT's Upshot finds one important difference—lower premium increases than pre-ACA averages:
That competitive pressure appears to be working in most markets, andparticularly in large cities. Over all, we found that if you compared the cheapest plan in the most popular category from 2014 with the cheapest plan in that same category for 2015, the price rose modestly, by 3.4 percent.For comparison, price increases in the individual market before the Affordable Care Act were in the neighborhood of 10 percent a year, and premiums for employer plans grew by 3 percent last year.
But people who just stay in the plan that was cheapest — and most popular — in 2014 are looking at much bigger increases. The average rate increase for those plans across the country is 9.7 percent [Margot Sanger-Katz and Amanda Cox, "Why Shopping Is So Important in Health Enrollment," New York Times: The Upshot, 2014.11.14].
You shop, you save. You cruise, you lose.
Competition matters: NYT finds the premium hikes are sharpest in places with fewer insurers participating in the exchange. Ah, competition—how much nicer it would be if the federal government would add some competition to the program by implementing the public option of Medicare for Everyone. Yes, Medicare, solid, reliable insurance with the least overhead and coverage pretty much everywhere—why aren't we enhancing the competition we already see working under the ACA?
Gallup finds another important difference between policies on the exchange and other insurance. In a survey conducted over the last three weeks, Gallup finds that folks who bought policies through the exchanges are about as satisfied with their insurance as folks who get coverage elsewhere, but exchange participants are more satisfied with the cost of their policies. I assume Gallup will survey that satisfaction again after this open enrollment period.
Premiums aren't going up everywhere. Most South Dakota counties will see cheaper plans on the exchange. According to this NYT interactive map, the cheapest silver plans out in West River will cost $46 less per month, a 15.2% drop. A slaunchwise tier of East River counties from Sully to Yankton will see a $31 decrease, down 10.9%. The rest of East River sees the lowest premium stay about the same or creep up a two to five bucks. South Dakota has the same three providers this year: Avera, Sanford, and Dakotacare.