Customers who bought health insurance on the overhaul’s public exchanges can expect a flurry of reports about big price hikes and some decreases for 2015 as insurers finalize their rates over the next few weeks. But they shouldn’t give much weight to any of this.
The actual change in a person’s policy will depend mostly on factors particular to their market and the other people covered by their plan. Here are five variables that could affect the prices you will see when you shop for 2015 coverage starting next fall.
1) Medical costs: A key reason behind premium changes, this reflects both the price of care and whether people are using more or less of it. This varies widely across the country.
2) Customer health: Insurers may have to raise rates if the number of customers with expensive medical conditions exceeds their projections. They also have to design their plans to make them attractive to healthy people, who will contribute more in premiums than medical claims.
“The bottom line is attracting enough healthy people to pay for the sick,” said insurance industry consultant Bob Laszewski. “That is 98 percent of the ball game.”
A temporary reinsurance fund set up by the overhaul is shielding insurers from some of this risk while they get used to the exchanges.
3) Age: The overhaul limits how much more an insurer can charge older people, who typically use more health care. An insurer needs premiums from younger customers to make up for what they can’t charge older policyholders anymore.
4) Competition: The cost of care can be higher in areas where one hospital or care provider dominates a market. Competition between insurers also can play a big role in holding down premium hikes in a market. Insurers don’t want to lose customers by hiking rates too high, especially since the exchange made it easier for people to shop for coverage.
5) The overhaul: Insurers say rates could climb due to a host of overhaul-related changes that happened after companies set their 2014 prices. Technical problems with the HealthCare.gov website last year frustrated many trying to buy coverage on the exchanges and may have turned off some younger customers.
President Obama also decided late last year to allow some policyholders to keep individual coverage they had before 2014. That may keep some healthy customers off the exchanges.
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