Many requirements of the healthcare reform law have effectively raised premiums, but others serve to save consumers money, including the individual mandate, researchers say.
Despite news coverage about rapidly increasing premiums on the individual market, prices would be higher and coverage would be less without the law, a Brookings Institution report says.
Yes, premiums continue to escalate at rates far exceeding the rate of inflation into 2017, but a study conducted by the nonpartisan think tank says that premiums will still be far lower than they would be in absence of the law.
Conventional wisdom is that the Patient Protection and Affordable Care Act increased premiums in the individual, non-group insurance market, if only because it increase the scope of coverage.
The report concedes that many of these new rules did indeed have the effect of increasing premiums. Notably, the PPACA mandates issue regardless of health status, requires certain "essential" benefits that were not previously required, and prevents limits on lifetime coverage, and does limit yearly out of pocket costs an enrollee can pay for covered services in a given year.
Meanwhile, other requirements of the healthcare reform law serve to save consumers money, including the individual mandate, which expanded the number of people purchasing overage in the individual market, consequently served to hold down premiums.
It created relatively transparent marketplaces where insurers must compete on premiums for products standardized by actuarial value, allowing competition to drive down prices.
The report says, essentially, that the latter factors outweigh those that served to increase prices, and despite the fact that premiums are increasing dramatically in nominal terms, they are much less than they would be had the law not been enacted.
"According to our analysis, average premiums for the second-lowest cost silver-level marketplace plan in 2014, which serves as a benchmark for ACA subsidies, were between 10% and 21% lower than average individual market premiums in 2013, before the ACA, even while providing enrollees with significantly richer coverage and a broader set of benefits," said report authors Loren Adler and Paul Ginsburg from the Brookings Center for Health Policy.
"Silver-level ACA plans cover roughly 17% more of an enrollee's health expenses than pre-ACA plans did, on average. In essence, then, consumers received more coverage at a lower price."
"Silver-level ACA plans cover roughly 17% more of an enrollee's health expenses than pre-ACA plans did, on average. In essence, then, consumers received more coverage at a lower price."
Significantly, the analysis does not include the effects of premium and cost-sharing subsidies that serve to make PPACA marketplace plans even more affordable.