Early Results: Average 2015 Exchange Premiums Decline Slightly

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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 percent, the largest increase in the study, while in Denver it will fall 15.6 percent, 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 percent 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.

The fact that average premiums in selected cities are declining doesn’t mean your rates will fall. Premiums may vary significantly within states. Premiums for plans with different benefit levels — higher platinum and gold and lower bronze — may behave differently than prices for silver plans. And just because your policy was the least expensive in your area for 2014 doesn’t mean it will stay that way for 2015.

Bottom line: There is increased competition as more insurers enter the marketplaces and tune prices to attract customers. But you may need to switch plans to take advantage of that.

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