Consumer Costs Continue to Increase in 2017 Exchanges

By Caroline F. Pearson, Elizabeth Carpenter and Chris Sloan
Avalere, January 18, 2017

Plans sold in exchange markets in 2017 feature higher premiums, growing consumer out-of-pocket costs, and more restricted access to providers and hospitals than in previous years, according to a new analysis from Avalere.

Premiums Increase Dramatically, Especially for Low-Cost Silver Plans

Following several years of single-digit premium growth, premiums increased 12 percent on average for silver plans in 2017 — from $496 per month in 2016 to $554 per month in 2017, this, according to the Avalere analysis.

Furthermore, premiums for popular low-cost silver plans (i.e., those with the lowest or second-lowest cost premiums in each region) increased 25 percent in 2017.

Fewer PPOs Offered on Exchanges

Avalere experts note that in 2017, only 31 percent of all plans sold in exchange markets are preferred provider organizations (PPO) or point of service (POS) plans. By comparison, in 2014, nearly 52 percent of plans sold on exchanges were PPO or POS products. In general, PPOs include a wider network of providers and cover more out-of-network care than health maintenance organizations (HMOs) and exclusive provider organizations (EPOs).

Out-of-Pocket Costs Also Rose in 2017, Particularly Deductibles

In addition to premiums, out-of-pocket costs for exchange products continue to rise, according to Avalere analysis of plans offered in the exchanges. Average deductibles for services and drugs jumped by 20 percent for silver plans in 2017 to $3,703.…

For plans sold in the exchanges in 2017, not only have the premiums gone up 25 percent for the popular low-cost silver plans, but the average deductibles for silver plans have increased 20 percent, and over two-thirds of plans now have more restrictive networks (with only 31 percent allowing out-of-network coverage with the penalty of higher cost sharing).

The instability and uncertainties are innate characteristics of the market for individual health plans. These problems would disappear with a single universal risk pool covering everyone – a single payer national health program, aka an improved Medicare for all.