All of the evidence isn’t in yet, but if the early trends hold true, Obamacare premiums are not going to skyrocket in 2015 — despite the warnings from critics that next year’s rates could be the next doomsday scenario for the law.
The New Republic’s Jonathan Cohn tracked some of the initial 2015 rates that have been released. Rates are going up some places. How much varies from state to state, as the map below from PriceWaterhouseCoopers showed. But there is not an epidemic of ballooning insurance rates. PWC’s overall average, though not a perfect metric, is a 7.5 percent increase.
“It seems that insurers that priced high are now moderating their premiums to gain market share, while those that priced low may be compensating for being a bit too optimistic,” Larry Levitt, vice president at the non-partisan Kaiser Family Foundation, told Cohn. “The overall story here is that insurers see the potential to gain market share and revenues. It’s a signal from insurance companies that they believe the law is here to stay and that the market is stable.”
A stable functioning market is not what Republican critics were counting on. “Americans will be shocked by higher premiums this November,” teased the Republican National Committee in late April. And as recently as June, Senate Republicans warned of “Obamacare’s looming 2015 rate hikes.”
A few things to keep in mind about the initial round of 2015 rates under Obamacare. First, they are preliminary. Any proposed rate increases greater than 10 percent must be reviewed by government regulators under the law.
Second, those figures don’t necessarily reflect what actual Americans will pay. About 85 percent of the people who purchased coverage on Obamacare’s insurance exchanges this year received financial help to pay for their plan. That assistance should help temper any rate increase seen in 2015.
Still, premium changes could complicate things for individual consumers, as National Journal’s Sam Baker detailed this week and TPM has reported in the past. If the way their subsidy is calculated changes because of the new rates, it could mean they either have to pick a new plan or pay more to keep their current one.
But as a picture of the overall Obamacare market, the early 2015 rates suggest that the law is stable.