by Prof. Tim Jost
Implementing Health Reform. On October 26, 2015, the Centers for Medicare and Medicaid Services (CMS) released its first snapshot of 2016 federally facilitated marketplace (FFM) plan premiums. CMS announced that premiums are up for benchmark second-lowest cost silver plans an average of 6.3 percent before the application of premium tax credits in thirty of the largest cities covered by the FFM, where 60 percent of marketplace enrollees live.
Overall, in 37 states covered by the FFM benchmark premiums are up 7.5 percent. (Hawaii, which switched to the FFM this year, was not included.) Average premium increases are higher than they were for 2015 (when benchmark second-lowest cost silver plans increased only 2 percent) but are much lower than individual market premium increases in the three years immediately preceding the adoption of the Affordable Care Act (ACA), which averaged over 10 percent per year.
For most consumers cost increases for 2016 will be in the single digits. But premium increases—and decreases—vary considerably from market to market. In Oklahoma City second-lowest cost silver benchmark plan premiums increased 35.1 percent, in Nashville benchmark premiums increased 22 percent, and in Charlotte, 21.7 percent. In Cleveland, Ohio, on the other hand, benchmark premiums decreased on average 6.3 percent, while in Indianapolis they dropped 11.8 percent. Statewide the greatest increases were in Montana, where benchmark premiums went up 34.5 percent and Oklahoma where they went up 34.7 percent, but in Mississippi benchmark premiums dropped 8.2 percent and in Indiana 12.6 percent.
Most markets continue to be competitive. For 2016, consumers in two thirds of counties will have three or more insurers to choose from.
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