Average premiums in the Affordable Care Act's individual marketplace were 10 to 21 percent lower in the first year of the law's implementation, even while providing better coverage, according to a recent analysis conducted by Health Affairs.
The analysis compares average premiums for the second-lowest cost silver-level marketplace plan in 2014 to average individual market premiums in 2013, before the law was implemented. Even with this cost reduction, the analysis found the ACA plans also cover about 17 percent more of patients' expenses than the plans that predate the healthcare reform law, according to the report.
"That the ACA might have caused premiums to drop so precipitously when its marketplaces took effect may seem surprising at first — it was to us," the authors wrote.
Because the ACA pushed so many more people into the individual market, the sheer size of the market was a critical factor in pushing premiums down, the analysis found. On top of that, the relatively transparent ACA marketplaces led to greater competition among payers, which also drove down prices. The analysis also found premiums in 2016 are a full 20 percent lower than 2009 projections made by the Congressional Budget Office, according to the report.
While the marketplaces are an improvement, they are still imperfect, the authors conclude. Each market has fared differently individually, allowing room to improve the quality and competitiveness of each marketplace.
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