Data analysis

In the first part of this series, we discussed how the results of the PwC study have waylaid some fear of high premium increases playing a role in the 2015 open enrollment period. To be fair, not everyone is buying what the report states but let’s put that aside for right now and look at what the study is stating. As of now, the available numbers show how Oregon might have a negative premium increase, at -2.5 percent, and some states of the likes of Colorado, Maryland, etc. showing an average increase of no more than 5 percent. The remaining study puts most other states in the range of 5-15 percent. Is your state one of those? Let’s find out.

On the heels of states with less than 5 percent premium rate increases, Utah is close with only a 5.3 percent expected rate increase for 2015. On the Eastern Coast, Florida is showing an expected rate increase of 7.4 percent, while Georgia and North Carolina are exhibiting 7.4 percent and 7.7 percent respectively. On the western coast, Arizona is leading with 9.8 percent as the expected premium increase and Nevada with an 8.1 percent increase. In the 10-15 percent range, Vermont, Iowa, Kansas, and Virginia are bordering in the range of 12-14 percent. The leader of the pack is Tennessee, with a 14 percent expected increase in the second open enrollment.

New Hampshire and Indiana are two states that are struggling with an expected increase of more than 15 percent. New Hampshire might have a 15.0 percent increase, while Indiana is looking at a 15.4 percent rise in insurance premium costs. For remaining states, no clear information is available. Even with the available information, there are high chances of a flux, which could change the actual percentage increase. These preliminary numbers have already become the grounds of contest among authorities. In the case of Florida, for instance, the GOP administration maintains that the premium increases could be of the order of 13 percent. The PwC study puts the average at 7.4 percent for Florida, while the HHS maintains that the most popular type of health insurance in Florida could be more affordable this year for several residents.

Naturally, there are several states that might ultimately show a different premium increase than what the preliminary PwC study numbers are demonstrating.  But even if the premium rates are what the study is showing, the impact on an individual purchasing or renewing his insurance might be altogether different. The averages presented for the states have large variations in scope in premiums for individuals. Rates by health plans are set at the local level, and several individual variables creep into the calculation, such as tobacco use, family size, family income, etc. Health plans have different products present through different avenues, and the end price would feature all these variables, which could impact the averages estimated by the PwC study.

There is also the chance of insurance regulators going through these numbers, which are in review as we speak, and changing them for states where they are too high. There is also the chance of higher medical care costs in particular areas of certain states, which could drive higher costs and result in higher insurance premiums for that locality. And then there is the chance of insurance companies adjusting the comparatively higher premiums presented in first open enrollment period for matching the competition in the second enrollment period. Some states might also see a drop in premium rates due to an increase in competition over the exchanges by the participation of newer health plans. Another gap in the study is the absence of tax credit calculation in insurance premiums for eligible people. Some people might be protected by the aegis of these subsidies, but others might still have to look for a cheaper insurance plan.

Ultimately, the impact on your individual health insurance might be way different than what the PwC study shows. As we move closer to the launch of second open enrollment on November 15, the health plans and insurance regulators will deliver an accurate snapshot of what your premiums might look like in 2015.

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