Sept. 25—The average premium for most new insurance marketplace plans is lower than extrapolations from a previous congressional estimate, according to a report this week from the U.S. Department of Health and Human Services (HHS). But critical details of those plans remain unknown.

The highly anticipated report provided the first glimpse into prices consumers will face from health plans sold in the marketplaces, also known as exchanges, created by the Affordable Care Act. Those plans begin enrollment Oct. 1.

The average consumer in most federally operated marketplaces will pay a $328 monthly premium, which is 16 percent less than the average premium HHS extrapolated from a 2012 Congressional Budget Office report.

Consumers in the 36 state marketplaces examined in the report will have an average of 53 plans offered by eight insurers. The number of insurers selling marketplace plans ranged from one to 13 companies.

States with the lowest average premium tended to have a higher average number of issuers selling plans, according to the report.

Many critical details about the new plans were not included in the report, a health policy expert noted. For instance, out-of-pocket costs and the size of plan networks were not released. Insurers have raised out-of-pocket charges and have limited provider networks—compared with employer-sponsored plans—to keep premiums low in state-run marketplaces that have previously released their plan details.

Although existing individual markets feature narrow network plans, Chad Mulvany, director of healthcare finance policy, strategy, and development for HFMA, said it appears that they will be far more prevalent in the coming marketplaces. An August McKinsey & Co. analysis found that combined exclusive provider plans and HMOs make up almost 50 percent of exchange plans offered in the 13 markets they reviewed. Although the abundance of HMO plans is putting downward pressure on rates within the exchange, the report lacks sufficient detail to determine how significant of an impact these plans are having by themselves.

An analysis of marketplace plans in six states released Sept. 25 by consultant Avalere Health found ACA marketplace plans will include high out-of-pocket costs, including average annual deductibles for so-called Silver plans that are more than twice the average deductible in employer-sponsored plans.
The higher costs came despite the marketplaces' statutory maximum of $6,350 for an individual’s out-of-pocket costs.

The HHS report authors noted that about 25 percent of the marketplace insurers included in the report will offer health plans in the individual market for the first time in 2014. At least some of those plans are Medicaid plans, which are noted for their restricted provider networks and low provider reimbursement.

Publication Date: Wednesday, September 25, 2013