A new issue brief from the Robert Wood Johnson Foundation examines likely premium costs in the health insurance marketplaces, finding that fears they will dramatically increase in 2015 may be unfounded. The brief’s Urban Institute authors note that for most places in the country, any increase in premiums will instead probably be in line with the overall growth in health care costs, rather than the double-digit increases some have predicted.
The paper finds that the overriding incentive for insurance companies to remain highly competitive means continuing to set premiums at low levels in the hopes of signing up enrollees in the next enrollment period. While the authors acknowledge factors that may lead to cost increases—including consumer pressure to expand provider networks and the fact that insurers may have kept costs artificially low in 2014—they believe these will be overridden.
Finally, the authors note that factors like more young people purchasing plans through the marketplaces, as well as the slow growth rate in overall health care costs, will also help keep premiums from skyrocketing.
“Based on plan participation in the marketplaces, we expect insurance companies to be eager to compete with health insurance plans in their markets to attract more customers,” said Andy Hyman, who works on coverage issues at the Robert Wood Johnson Foundation. “This high level of competition should keep premium increases in most markets no higher than we have seen in previous years, with marketplace plans remaining an affordable option for high-quality health coverage.”
