Premium costs 2014: lower because of health reform

January 28, 2011

The Obama administration has released a report, based on HHS and CBO data and analysis, predicting that PPACA will cause health care premiums to be lower in 2014 than they would have been without reform. We’re happy to see that the report gives a great deal of credit to insurance exchanges as a powerful contributor to the lower projected premiums. Exchanges will help moderate premium growth by giving “…individuals and small businesses pooled purchasing power to get private health insurance at lower premiums.” Exchanges will also “…make it easier and less costly to purchase health insurance, offering clear and standard information on plans to consumers.” And exchanges will bring more competition into the market as well, by offering a level playing field for new private health plans to compete “…based on price, quality, and services offered.”

Our experience running the nation’s largest private Medicare exchange says this analysis is on the right track. For example, we know that many insurance carriers visit our exchange to compare their plans against others and make sure they’re staying competitive; it’s a transparent mechanism where they can see how their plans stack up against others in the same locality. And more than half of our enrollees use our exchange during AEP to evaluate their current coverage and make changes if they feel their premiums have gone up too much, using their power as informed consumers to take charge of their health care benefits.  Competition, transparency, informed consumers: all factors that help keep costs in line on our exchange today, and will do the same thing for exchange users in 2014.

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