Early Analysis Finds a Drop in Obamacare Premiums Next Year

A first look at policies sold on the online exchanges shows a small decline in the average cost of coverage for 2015. But consumers should still shop for health insurance with care.

In preliminary but encouraging news for consumers and taxpayers, insurance filings show that average premiums will decline slightly next year in 16 major cities for a benchmark Obamacare plan.

Prices for a benchmark “silver” or mid-priced plan sold through the health law’s online marketplaces aren’t all moving in the same direction, however, a report from the Kaiser Family Foundation (KFF) shows. (Kaiser Health News is an editorially independent program of the foundation.) In Nashville, the premium will rise 8.7%, the largest increase in the study, while in Denver it will fall 15.6%, the largest decrease.

But overall the results, based on available filings, don’t show the double-digit percentage increases that some have anticipated for the second year of marketplace operation. On average, rates will drop 0.8% in the areas studied.

“If you’re the government, this is great news,” said Larry Levitt, KFF senior vice president. “Competition in the marketplaces is helping drive down the cost of the tax credit” that subsidizes coverage for lower-income consumers.

That’s because the credits are based on the cost of the second least-expensive silver plan, known as the benchmark plan. That’s the one KFF studied. The lower the benchmark-plan rates, the lower the cost to taxpayers.

For consumers, the picture is also promising—but more complicated.

The main message: shop around, says Levitt.

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