A healthcare actuary told the Access Health CT Board of Directors Thursday that even if an individual re-enrolls in the same health plan they purchased last year through the exchange they may see an increase in their premiums.
Premiums vary by age, geographic area, family size, and choice of carrier. The amount of subsidy a person receives is based on income. In addition to the changes in the federal poverty level chart, the exchange now has four private insurance carriers and the benchmark plans used to calculate the premium subsidies also have changed.
That means consumers may be paying more on a monthly basis than they did in 2014 because their subsidies from the federal government will be lower even if their income hasn’t changed and they remain on the same plan.
The benchmark plan used in the calculation is the second cheapest silver level plan offered by all of the carriers in the exchange.
“If you choose a plan that’s not the benchmark, you pay what you would pay for the benchmark and then you get credited the difference between the plans if you buy down or you pay the difference between the plans if you buy up,” Wakely Consulting’s Julia Lerche told the board Thursday.
A large portion of the 59,256 Access Health CT consumers receiving subsidies purchased the lowest cost silver plan in 2014, according to Lerche.
“The way the subsidy works, the results are a little counterintuitive,” Lerche said. “Even if the rate for the plan that you’re in does not change before subsidies because that rate has gone down, now that differential between your plan and the benchmark plan has changed and you could see a higher increase than the zero change in the rate.”
Lerche used the example of Ted, a single 25-year-old from Fairfield County whose income is about $23,000, or 200 percent of the federal poverty level. In 2014, Ted enrolled in the lowest cost silver plan, which made the monthly premium amount about $91 after the subsidy. If he automatically re-enrolls in that plan in 2015, his monthly premium will go up to $120 per month because the benchmark premium has changed from $330 per month to $310 per month.
That means Ted’s subsidy from the federal government will go down even though he hasn’t increased or decreased his salary. But Ted can shop around for a different plan starting on Nov. 15 when the second enrollment period begins.
His lowest priced option in 2015 would be a plan that has him paying about $116 per month. Rates vary based on age and where individuals live in the state.
Lerche said there’s very little claims data the insurance carriers used in order to set their rates for 2015. What the insurance carriers knew this year before setting their rates was the demographics of their members.
There are currently about 59,256 individuals participating in Connecticut’s exchange and receiving a subsidy from the federal government. Total enrollment through the exchange is about 283,114 individuals. Most of them, or about 207,020, are on Medicaid.
There are four medal tiers — platinum, gold, silver, and bronze.
There is only one carrier offering a platinum plan in 2015. There will be seven new plans offered at the gold, silver, and bronze level in 2015, bringing the total number of plans offered up to 41.
The carriers offering plans to individuals on the exchange include Anthem, ConnectiCare, HealthyCT, and UnitedHealthcare, which is new this year to the individual marketplace.