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Rates of Change: Putting 2015 Insurance Premiums into Context


Friday, June 27, 2014

***SLIGHT CHANGE IN BRIEFING TIME: 12-1:30 PM, LUNCH AVAILABLE AT 11:45***

Health insurance premiums have been one of the most closely-watched features of the new health insurance marketplaces. In 2014, insurers set rates based on limited data about who would sign up for coverage. Round II of open enrollment is fast approaching, allowing little time to process the first year’s data and to prepare for tomorrow. For 2015, some analysts anticipate increases of 10 percent or less, while others forecast growth of 20 percent or more.

Wherever these numbers ultimately land, they are likely to vary from state to state, with different effects on consumers, providers, insurers and the federal budget. This briefing will focus on factors influencing insurance premiums, state and federal regulatory roles in reviewing rates, and what to expect in 2015. A distinguished panel of experts will examine these and related issues.

Jonathan Gruber, professor of economics at the Massachusetts Institute of Technology, provided a historical context for today’s rate increases, identifying salient trends in premium setting before and after the passage of the Affordable Care Act.

Cori Uccello, actuary and senior health fellow at the American Academy of Actuaries, identified the dominant factors that influence the rate-setting process in private insurance and address how those factors have translated into the new online exchanges.

David Cusano, senior research fellow at the Center on Health Insurance Reforms at the Georgetown University Health Policy Institute, addressed state and federal rate review programs, and examine variability in approaches to transparency and review of the rate-setting process.

Elizabeth Hall, vice president for federal affairs at WellPoint, shared a private insurer’s perspective on the challenges of providing and pricing health coverage in new markets with significant regulatory variation and limited claims data.

Ed Howard of the Alliance and Rachel Nuzum of Commonwealth co-moderated.

Contact: Sarah Dash (202)789-2300 sarahdash@allhealth.org

Follow the Briefing on Twitter: #Rates2015

The event was sponsored by the nonpartisan Alliance for Health Reform and The Commonwealth Fund.

Transcript, Event Summary and/or Webcast and Podcast

Transcript: Transcript (Adobe Acrobat PDF), 6/27/2014
Full Webcast/Podcast: Full Video from C-SPAN

Speaker Presentations

Nuzum Slides (Adobe Acrobat PDF), 6/27/2014
Gruber Slides (Adobe Acrobat PDF), 6/27/2014
Uccello Slides (Adobe Acrobat PDF), 6/27/2014
Cusano Slides (Adobe Acrobat PDF), 6/27/2014
Hall Slides (Adobe Acrobat PDF), 6/27/2014

(If you want to download one or more slides from these presentations, contact us at info@allhealth or click here for instructions.)

Source Materials

Avalere - Average Exchange Premiums Rise Modestly in 2015 and Variation Increases (Adobe Acrobat PDF), , 6/1/2014
Drivers of 2015 Health Insurance Premium Changes (Adobe Acrobat PDF), , 6/1/2014
Drivers of Premium Increases and Review of Health Insurance Rates (Adobe Acrobat PDF), , 1/20/2012
Growth and Variability in Health Plan Premiums in the Individual Insurance Market Before the Affordable Care Act (Adobe Acrobat PDF), , 6/1/2014
How Will 2015 Health Insurance Premiums Compare to 2014? (Adobe Acrobat PDF), , 5/13/2014
Premium Affordability, Competition, and Choice in the Health Insurance Marketplace, 2014 (Adobe Acrobat PDF), , 6/18/2014
Rate Review: Spotlight on State Efforts to Make Health Insurance More Affordable (Adobe Acrobat PDF), , 12/1/2010
What To Expect For 2015 ACA Premiums: An Actuary Opens The Black Box (Adobe Acrobat PDF), , 5/30/2014
What's Behind Health Insurance Rate Increases? An Examination of What Insurers Reported to the Federal Government in 2012-2013 (Adobe Acrobat PDF), , 12/31/2013
Will Premiums Skyrocket in 2015? (Adobe Acrobat PDF), , 5/30/2014
4 Reasons Why Obamacare Exchange Premiums May 'Double In Some Parts Of The Country' In 2015 (Adobe Acrobat PDF), , 3/20/2014
Finally, We're Getting the Real Story on Obamacare Rate Shock (Adobe Acrobat PDF), , 6/19/2014
Obamacare 'sticker shock' not so shocking, conservative economist suggests (Adobe Acrobat PDF), , 6/18/2014
Premium Rate Variation in Exchanges is an Eye Opener (Adobe Acrobat PDF), , 8/7/2013
Premiums Rise at Big Insurers, Fall at Small Rivals Under Health Law (Adobe Acrobat PDF), , 6/18/2014
Six Reasons Obamacare Premiums Are Going Up Next Year (Adobe Acrobat PDF), , 5/14/2014
Materials List (Adobe Acrobat PDF), , 6/27/2014
Speaker Biographies (Adobe Acrobat PDF), , 6/27/2014
Source List (Adobe Acrobat PDF), , 6/27/2014
Agenda (Adobe Acrobat PDF), , 6/27/2014
Agenda & Presentations (Adobe Acrobat PDF), , 6/27/2014
All Background Materials (Adobe Acrobat PDF), , 6/27/2014

Photos

When determining 2015 health insurance premiums, the largest drivers are changes in expectations about risk pool composition, transitional policy for non-ACA compliant plans, reduction of reinsurance program funds and medical trends, Cori Uccello, actuary and senior health fellow at the American Academy of Actuaries, stated at a June 27 Alliance briefing, Rates of Change: Putting 2015 Insurance Premiums into Context.

The Department of Health and Human Services (HHS) will now review all rate increases unless the state already has an effective rate review program, David Cusano, senior research fellow at the Center on Health Insurance Reforms at the Georgetown University Health Policy Institute, stated at a June 27 Alliance briefing, Rates of Change: Putting 2015 Insurance Premiums into Context.

Market rules changed significantly after ACA implementation and pricing insurance products became more complicated. Insurers will have more concrete information about demographics in 2015, but obtaining a complete picture of medical claims and pharmaceutical data for purposes of setting premiums will take several years, Elizabeth Hall, vice president for federal affairs at WellPoint, stated at a  June 27 Alliance briefing, Rates of Change: Putting 2015 Insurance Premiums into Context.

A study conducted on rates between 2008 and 2010 concluded that premium rates increased by 10 percent, on average, in one year. Rates were also highly variable across states, Jonathan Gruber, professor of economics at the Massachusetts Institute of Technology, stated at a June 27 Alliance briefing, Rates of Change: Putting 2015 Insurance Premiums into Context.

 

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