Average 2015 premium rate increases on the new health insurance exchanges are likely to stand in the high single digits, according to data collected from half the states.
Nationwide, increases in proposed 2015 premium rates in the individual health insurance market, which includes the new public exchanges, are trending between 7 percent and 8 percent, according to data collected by New York-based PricewaterhouseCoopers LLC.
"It seems to be staying in that single-digit range," Caitlin Sweany, senior manager at PwC's Health Research Institute, said on Thursday. "We've [analyzed] several iterations of this data."
PwC is tracking the release of public data on proposed 2015 individual premium rates and has highlighted the information with an interactive map. As of Thursday, the consultancy had reported data from 24 states and the District of Columbia, with the aggregate average proposed premium increase pegged at 7.5 percent.
State regulators will announce the actual 2015 individual insurance premium rates by the fall.
Most Americans, about 165 million, get health insurance through employer-sponsored group plans. With 8 million lives enrolled in the new Patient Protection and Affordable Care Act-spawned exchanges, the individual market is now in a state of HIX domination.
"The individual market in most states is pretty much what's on the exchange," Sweany said.
Assessing the Numbers
State-by-state variation in key data points, such as enrollment and number of participating insurance carriers, has been a HIX hallmark in the exchanges spawned under the federal Patient Protection and Affordable Care Act.
Wide variation is also present in the proposed 2015 individual insurance rates, Sweany said. "It really depends on the market and the state," she said. "It's really hard to generalize."
In Arizona, insurance carriers offering individual health insurance policies filed a wide range of proposed premium changes for 2015, the PwC data shows, with one carrier seeking a 27 percent increase and another proposing a 23 percent rate cut. Vermont is on the high end of the average-premium-rate increase spectrum, with a 12.6 percent hike proposed statewide for next year, according to PwC.
"People are looking for one number to hang their hats on," Sweany said. "There's a lot of variation in the individual market."
Jaime Estupiñan, a partner at New York-based Strategy&, which is working with PwC to monitor individual premium rates, said there are a host of factors influencing next year's health insurance markets.
"We're looking at a composite of various markets, and each market is complex," he said of the effort to track individual premium rates. "Coming out with a single number is going to be fraught with over-simplification."
One trend in the data should have a calming effect on premium rates in the exchanges, Estupiñan said.
"In many of the insurance exchanges, some of the larger national players did not join. In many markets, there will be more of these kinds of new entrants [to the exchanges] in 2015," he said, adding these established healthcare payers are adopting a "conservative premium-setting approach."
In particular, the set of carriers that will be new to the exchanges in 2015 appears unlikely to try to under-cut HIX competitors with aggressively low premium rates, he added.
Cost-sharing Calculation
Premium rates only tell part of the story about 2015 HIX consumer costs and the business strategies of carriers operating on the exchanges, said Katherine Hempstead, team leader and senior program officer at the Princeton, NJ-based Robert Wood Johnson Foundation.
"When we look at rates, we also need to look at cost sharing," she said, adding that the number and scale of cost-sharing mechanisms on the exchanges such as co-pays and deductibles has fueled some of the harshest HIX criticism. "There's a lot of experimentation going on. At some point, we need to have fewer cost sharing options."
Healthcare providers view cost-sharing as a net negative financially because higher cost sharing results in a higher debt collection burden.
In July, the Robert Wood Johnson Foundation and Breakaway Policy Strategies released a report on exchange cost sharing in 2014. The key findings, which focus on HIX health insurance policies in the "silver" tier, include primary care physician visit copays as high as $75 and specialist visit copays as high as $150.
In addition, unlike most employer-sponsored insurance, many silver policies on the exchanges subject PCP and specialist office visits to a deductible, the report found.
"Anyone who's only looking at the premium rates in 2015 is going to miss a lot of action," Hempstead said.
Christopher Cheney is the CMO editor at HealthLeaders.