Variation in ACA Premiums
ACA premiums have been a key topic of discussion this month as more state marketplaces and companies released proposed and final rates for QHPs or “qualified health plans” that will be available on October 1. As discussed in an earlier blog, ASPE released an analysis of rates in July from 10 mostly state based marketplaces that showed premiums will be 10 — 18 percent lower than CBO estimates. Subsequent releases show that premiums will increase in some markets, for example Ohio and Florida, as plans move to more comprehensive “essential health benefit packages”. Rates for plans in the federally facilitated marketplaces will not be released until September.
The Alliance for Health Reform held a meeting on ACA premiums entitled “Rate Shock or Not” that discussed the reasons for some of the premium differences. These include variations by age, smoking, cost sharing differences, network size and provider reimbursement rates, level of competition, an active vs. passive Marketplace, the ability of Medicaid managed care companies to build on discounted provider payments, the presence of a dominant hospital system, insurer size and experience in the individual and small group markets. There is also a lack of data on current premiums in the individual market and the health status of the uninsured that make pre and post ACA comparisons difficult.
Joel Ario et al wrote an interesting Health Affairs blog that provided some additional insight on the wide variation in premiums that they called “startling”. They cite a 76 percent difference in premiums between the second highest silver plan and second lowest silver plan in New York and only a 3 percent difference in San Francisco. They cite a number of reasons that premiums vary so much: actuaries are working in the dark, similar to Part D plans are willing to bid low in the first year to acquire members, plans sponsors are not all the same (e.g. some plans have more narrow networks or more generous drug benefits) and active purchasing works.
Resources
Health plans operating within the Exchanges must evolve from a culture of sales and marketing to a culture that is member-centric and more accountable with a greater sense of urgency. GHG can help, find out how.
From sales and marketing to staff training, data management and reconciliation, GHG Founder & Executive Chairman John Gorman breaks down each potential roadblock and offers tips and suggestions on how to keep your organization moving on the right path before the launch of the Exchanges, in this recording from the 2013 GHG Forum.