Lessons Learned From the Affordable Care Act: The Premium Subsidy Design May Promote Adverse Selection.

Since 2014, average premiums for health plans available in the Affordable Care Act marketplaces have increased. We examine how premium price changes affected the amount consumers pay after subsidies for the lowest-cost bronze and silver plans available by age in the federally facilitated exchanges....

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Published in:Medical Care Research & Review Vol. 75; no. 6; pp. 762 - 773
Main Authors: Graetz, Ilana, McKillop, Caitlin N., Kaplan, Cameron M., Waters, Teresa M.
Format: Journal Article
Published: Sage Publications Inc. Dec2018
Online Access:View this record in EBSCOhost
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      dt: Dec2018
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      pub: Sage Publications Inc.
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        atl: Lessons Learned From the Affordable Care Act: The Premium Subsidy Design May Promote Adverse Selection.
      aug:
        au:
          Graetz, Ilana
          McKillop, Caitlin N.
          Kaplan, Cameron M.
          Waters, Teresa M.
        affil: University of Tennessee Health Science Center, Memphis, TN, USA
      sug:
        subj:
          Insurance Economics
          Insurance Coverage Economics
          Patient Protection and Affordable Care Act Statistics and Numerical Data
          Health Insurance Exchanges Economics
          Insurance Statistics and Numerical Data
          Patient Protection and Affordable Care Act Economics
          Insurance, Health Economics
          Insurance, Health Statistics and Numerical Data
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          Aged: 65+ years
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      ab: Since 2014, average premiums for health plans available in the Affordable Care Act marketplaces have increased. We examine how premium price changes affected the amount consumers pay after subsidies for the lowest-cost bronze and silver plans available by age in the federally facilitated exchanges. Between 2015 and 2016, benchmark plan premiums increased in 83.3% of counties. Overall, rising benchmark premiums were associated with lower average after-subsidy premiums for the lowest-cost bronze and silver plans for older subsidy-eligible adults, but with higher after-subsidy premiums for younger adults purchasing the same plans, regardless of income. With recent discussions to replace or overhaul the Affordable Care Act, it is critical that we learn from the successes and failures of the current policy. Our findings suggest that the subsidy design, which makes rising premiums costlier for younger adults looking to purchase an entry-level plan, may be contributing to adverse selection and instability in the marketplace.
      pubtype: Academic Journal
      doctype: Journal Article
      ougenre: Article
    language: English
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