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U.S. Department of Health & Human Service
Florida health insurance rate changes
Jonathan Gold, Press Secretary at the U.S. Department of Health and Human Services issued the following statement on Florida health insurance rate changes.
“Consumers in Florida will continue to have affordable coverage options in 2017 and will benefit from two new issuers entering the Marketplace. Last year, the average monthly premium for people with Marketplace coverage getting tax credits increased just $2, from $82 to $84 per month, despite headlines suggesting big rate increases. People in Florida understand how the Marketplace works, and they know that they can shop around and find coverage that fits their needs and budget. In fact, last year almost 40 percent of them did exactly that by switching plans to save money. In addition, the vast majority of consumers in Florida qualify for tax credits that reduce the cost of coverage below the sticker price. Today’s announcement is just the beginning of the rates process, and consumers will have the final word when they vote with their feet during Open Enrollment. ”.
Background
Proposed rates aren’t what consumers pay. While data submitted to CMS shows an average rate increase of 13.3% in Florida, a report from the U.S. Department of Health and Human Services demonstrates that proposed premium changes from preliminary rate filings do not capture what Marketplace consumers actually pay. In Florida, the average Marketplace premium among people with tax credits went from $82 last year to $84 per month in 2016, a modest 2% change despite reports based on preliminary rate filings predicting “big rate increases.”
Consumers in Florida have options. Cigna and Harken Health are entering the state’s Marketplace, allowing consumers to access tax credits for Cigna and Harken Health plans the first time, while United is exiting. People in Florida will be able to choose from 11 issuers next year, one more than this year.
- Changes from year to year are expected. The ACA has ushered in a new individual insurance market that offers a different type of coverage than previously existed. As a result, issuers in the individual market compete on quality and cost-effectiveness. Unsurprisingly, some issuers are adapting faster than others to this new market. That's the way a healthy market works.
Most people receive tax credits and can buy a plan for less than $75 per month.
- 91% of Marketplace consumers in Florida receive tax credits, which are designed to protect consumers from premium increases and help make coverage affordable.
- Tax credits increase if the cost of the second lowest-cost silver, or benchmark, plan goes up. So if all premiums in a market go up by similar amounts, 91% of Marketplace consumers in that market will not necessarily pay more because their tax credits will go up to compensate. Average rate increases reported with the preliminary rate filings do not account for tax credits.
- For 2016 coverage, 78% of customers in Florida had the option of selecting a plan with a premium of $75 or less per month after tax credits.
Shopping: The ACA Marketplaces helps consumers shop around for the best deal.
- Prior to the ACA, it was nearly impossible for consumers to compare plans and shop around easily – and many Americans went uninsured because they couldn’t afford insurance or had pre-existing conditions. Those who did have insurance in the individual market were often trapped in the plan they had, since people with even small health problems could be denied coverage or charged an exorbitant price if they tried to switch plans or issuers.
- Today, Marketplace consumers in Florida can purchase any available plan regardless of health conditions, and tools such as the doctor lookup and out-of-pocket cost calculator help them find the plan that meets their needs. Last year, 38% of returning Marketplace consumers in Florida switched plans. They saved an average of $408 annually.
Prior to the Affordable Care Act, plans were typically inferior and excluded services like maternity care, or even routine services like prescription drugs. Plans also often charged a higher premium, or denied coverage altogether, to consumers due to a pre-existing condition. Now, all consumers have the option to purchase quality, affordable coverage.
- This is a big deal for as many as 7.8 million people in Florida with a pre-existing condition.
- Since major provisions of the Affordable Care Act went into effect, Florida’s uninsured rate fell from 24.7 percent in 2013 to 15.3 percent in 2015 for non-elderly residents, according to new data released just last week.
Health insurance is clearly something people in Florida like, want, and need: 1,742,819 people signed up for 2016 coverage
Both Marketplace and non-Marketplace consumers continue to benefit from the low health care cost growth of recent years.
- Marketplace rates remain well below expectations when the law was passed. Marketplace rates for 2014 came in about 15% below Congressional Budget Office (CBO) projections in 2010. Better-than-expected Marketplace premiums are due in large part to lower-than-expected economy-wide health care cost growth and other efficiencies.
- For the half of Americans who obtain health insurance through an employer, premiums for family coverage grew by an average of 5% per year from 2010 to 2015 – compared with about 8% per year from 2000 to 2010. Premiums grew at an even slower 4.2% rate in 2015. If premium growth since 2010 had matched the average growth rate over the prior ten years, the average family premium would have been almost $2,600 higher in 2015.
