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So Are Premiums Up or Down?

Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.
The Florida Channel
Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.

Some premiums on the federal health exchange for 2015 are going up. Some are going down. That's all the public really knows right now.

But it appears that the big idea behind the marketplace -- creating competition -- may be working, since three new companies have joined the 11 early adopters, according to Florida's Office of Insurance Regulation.

The OIR released a forecast for a 13 percent premium hike for 2015 plans on the federal marketplace ( earlier this week.

Then the White House released a counter-punch on Wednesday, saying that the plans that most patients enroll in -- the second-lowest-priced "silver" ones -- are actually getting more affordable.

About 75 percent of Floridians live in areas where the second-cheapest silver premium will actually decline, said Tasha Bradley, a spokeswoman for the federal Department of Health and Human Services.

The HHS analysis suggests that the cost of that silver plan will decrease by 3 percent in Hillsborough County and by 8 percent in Pinellas County. Other estimated declines are 6 percent in Miami, 12 percent in Orlando, and 17 percent in West Palm Beach.

The state said the federal methodology was misleading; the feds said the same thing about the state.  

There's a lot of guesswork going into both, health policy analysts say. The companies still don’t really know what the experience is going to be with medical expenses, said Gary Claxton, vice president of the Kaiser Family Foundation.

"They know a little bit  more about who they enrolled (for 2014) in terms of their demographics;  they still don’t know much about their health," he said. 

The state based its forecast of a 13.2 percent premium increase on what the companies told OIR about their current enrollment and what they think will happen for 2015, said OIR spokesman Harvey Bennett.

The examples that OIR presented -- a 28-year-old adult with an income of $27,000 and a family of four with an income of over $50,000-- showed premiums for 2014 and projected for 2015 that were four times as high as the $68-a-month average given in a federal report in June.

Bennett said OIR derived those estimates by averaging premiums of all the silver plans, the most popular product. (Gold and platinum plans cover a higher percentage of medical expenses, but cost more than silver; bronze costs less than silver, but is available only to young adults, and no tax credits can be used to buy it.)

Elizabeth Carpenter, who analyzes marketplace premiums for Avalere Health, says that using an average can be misleading: Shoppers tend to choose plans on the low-cost end of the spectrum unless there is a good reason to spend more.

Indeed a federal report in June indicated that two-thirds of enrollees chose either the lowest or second-lowest-cost silver plan in 2014.

"Sometimes the 'average' is not helpful," Carpenter said.

Bennett said OIR took that into account in coming up with its forecast, giving more weight to populous counties and companies with more enrollees.

But that's also what the federal estimates did. They compared prices of the "benchmark" plans for this year and next year, defined as the second-lowest-cost silver plan, the one that has been most popular because the tax credit is pegged to it.

Carol Gentry, founder and special correspondent of Health News Florida, has four decades of experience covering health finance and policy, with an emphasis on consumer education and protection.