Obamacare Is Beating Expectations

by Dish Staff


Ezra heralds the news:

A new report from the Kaiser Family Foundation finds that in seven major cities that have released data on 2015 premiums, the price of the benchmark Obamacare plan — the second-cheapest silver plan, which the federal government uses to calculate subsidies —  is falling.

Yes, falling.

“Falling” is not a word that people associate with health-insurance premiums. They tend to rise as regularly as the morning sun. And, to be fair, the Kaiser Family Foundation is only looking at 16 cities in 15 states and the District of Columbia, and the drop they record is, on average, a modest 0.8 percent (though this is the same methodology they used in 2014, and to good results). But this data, though preliminary, is the best data we have  —  and it shows that Obamacare is doing a better job holding down costs than anyone seriously predicted, including Kaiser’s researchers.

Cohn weighs in:

To appreciate what that means, consider what the market for buying insurance on your own (rather than through an employer) was like before Obamacare came along. Between 2008 and 2010, premiums went up every year and they did so by at least 10 percent, according to an analysis that MIT economist Jonathan Gruber did for the Commonwealth Fund. And that was for insurance that might be sold only to healthy people or that had benefits far skimpier than the ones required by the Affordable Care Act. “There is variation, but so far, premium increases in year two of the Affordable Care Act are generally modest,” Drew Altman, Kaiser’s President and CEO, said in a press release. “Double digit premium increases in this market were not uncommon in the past.”

But it isn’t all good news. Jason Millman explains:

[I]n 12 of the 16 cities that Kaiser studied, at least one of the insurers that offered a benchmark plan in 2014 no longer has benchmark status for 2015. That means that insurer might have raised rates, or another insurer is offering lower prices in 2015. Either way, if a person remains enrolled in what used to be a benchmark plan, that person (assuming life circumstances haven’t changed) will have to pay more toward their premium.

That’s all to say that shopping around for insurance this year could be really important for the new Obamacare enrollees.