Health Insurance Rates Likely to Rise in 2015

Health and Human Services Secretary Kathleen Sebelius said health-insurance premiums are “likely to go up” in 2015, an acknowledgment that the Obama administration doesn’t believe the sweeping changes to the health-insurance marketplace will end premium increases in the near term.

  • The range of premiums people will see in 2015 is expected to be an important measure of the health-care law’s success. Supporters have staked its success on providing coverage that people consider to be “affordable,” though they have generally stopped short of claiming that its provisions will directly lead to premium decreases.
  • For now, the impact of those changes is unknown, because insurers have just begun weighing their rates for the year to come. The enrollment period for coverage in the coming year is still open—it closes at the end of this month—and insurers are hoping to have more information about medical claims by the time they need to submit their proposed rates to federal and state governments later this spring.
  • Many consumers across the U.S. saw premiums increase in 2014 because of requirements that new plans be more generous. Premiums for individuals who had previously benefited from the lowest rates because they could show clean bills of health also rose. But many of those rates were based on guesswork by health plans about the riskiness of the customers they would end up with, and as our Exchange Explorer tool shows, they have bet all over the map.
  • The law’s messy rollout added another twist, as it may have skewed the makeup of people who obtained coverage toward those who knew they were more likely to need it.
  • So far, the proportion of young Americans signing up for coverage through state and federal exchanges created under the health-care law has remained below levels thought necessary to keep premiums stable.
  • On Tuesday, the Obama administration released enrollment numbers for February showing that about 25% of people age 18 to 34 picked a plan, lower than a 40% target believed to keep premiums relatively stable. However, there are risk-adjustment provisions in the law designed to compensate insurers that end up with higher medical claims now that they can’t charge people more based on their medical history, and federal officials have previously said they expected those to mitigate any premium increases.
  • Overall, the administration said 4.2 million people enrolled in health-insurance plans through February, a number that suggests enrollment could fall short of projections made by the nonpartisan Congressional Budget Office that 6 million to 7 million people would enroll in private plans for 2014.

*Modified from a article

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