The White House seemed none too pleased this week when the Florida insurance regulator announced that insurance premiums under Obamacare would go up an average of 13.2 percent in 2015. In fact, the administration took the unusual step of releasing its own analysis and implied that the official figure from Florida could be “misleading.”
Because the two reports are looking at different metrics, they could both technically be true. And to be clear, both of the metrics look at premiums before any subsidies consumers may be eligible for are applied.
The 13.2 percent number from the state regulator accounted for every kind of plan, from silver to gold to platinum. The administration, on the other hand, chose to focus on ‘benchmark plans,’ which reflected a decline in costs.
The administration’s analysis looked at the second-lowest silver-level health plan, which covers 70 percent of costs and serves as the benchmark plan for the tax credits offered under the law. About 65 percent of the law’s 8 million sign-ups enrollees in 2014 selected a silver-level plan, according to the final HHS report.
The administration’s analysis found that the ‘benchmark plan’ in Florida would actually decline by 4 percent statewide. In some places, it will drop as much as 17 percent, and roughly 75 percent of Florida’s residents live in areas where the ‘benchmark plan’ will decrease from 2014 to 2015, the analysis showed.
“Even averages can be misleading,” an administration official told TPM on Thursday of the Florida insurance regulator’s findings. “In short, in Florida at least, 2015 is shaping up to be a year of even more affordable health insurance options for consumers.”
The White House has already pledged to diligently combat negative headlines about 2015 premiums, as Politico reported last month, ready to produce talking points for local congressional representatives and reporters. The response to the Florida rate news seems to be an early test of that apparatus.
“We are not going to let anyone distort the debate,” senior White House adviser Tara McGuinness told Politico.
The Florida Office of Insurance Regulation dismissed the administration’s response to its report. “Any assertion that overall rates are going down in Florida is false,” a spokesperson told the Tribune.
“Average premiums before tax credits are going up. But, in much of Florida, including many populous areas, the second lowest cost silver plan is actually going down,” Larry Levitt, vice president at the Kaiser Family Foundation, told TPM. “This is competition at work. And it’s definitely good news for the federal government, since they base tax credits on the second lowest cost silver plan.”
It is more of an open question, though, what it will mean for individuals, Levitt added. As has now been reported extensively, if the ‘benchmark plan’ in a state changes, it could mean that people must either change their plan or pay more to keep their current one because it will change how the tax credits are calculated. And a changing ‘benchmark plan’ could be one reason that the average is going down in Florida.
“This is why it’s so important for people to shop around,” Levitt said, “even though they will be automatically renewed into their current plan.”