Health benefit exchanges post modest premium increases in 2015; ability of narrow networks to continue to moderate premiums uncertain
A review of plan year 2015 premium rates by the Robert Wood Johnson Foundation and the Urban Institute found premiums in state health benefit exchange marketplaces increased by 2.9 percent over 2014 plans. The report cautions continued overall modest premium rate growth is dependent on market forces in the provider and patient segments. On the provider side, health plan issuers have been able to get fewer providers to care for larger patient panels for lower reimbursement rates.
[W]hether these arrangements are sustainable and remain attractive to consumers over time is unknown,” the report concludes. “If consumers prefer broader networks and are willing to pay for them, the market will respond by offering such products, and premiums will consequently increase.”
Most observers, however, believe keeping premiums as low as possible – particularly in a mostly subsidized market like the exchanges – will trump other consumer desires, including wider provider networks. But as the report notes, the sustainability of the narrow provider network model is under pressure from patients who complain to regulators and public policymakers when they have problems finding a provider who will accept their coverage. That in turn could generate legislation and regulations making it harder for plans to rely on narrow networks to moderate premium rates. “States and the federal government could also engage in greater regulation of network adequacy; this, too, could cause premiums to increase,” the report notes.
In addition, the report cautions if underlying health care costs begin to grow at historical rates versus lower rates seen in recent years, “it will be hard for insurers to avoid reflecting this in their premiums.”
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