TY - JOUR
T1 - Lessons Learned From the Affordable Care Act
T2 - The Premium Subsidy Design May Promote Adverse Selection
AU - Graetz, Ilana
AU - McKillop, Caitlin N.
AU - Kaplan, Cameron M.
AU - Waters, Teresa M.
N1 - Publisher Copyright:
© The Author(s) 2017.
PY - 2018/12/1
Y1 - 2018/12/1
N2 - 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.
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.
KW - Patient Protection and Affordable Care Act
KW - health insurance exchanges
KW - insurance pools
UR - http://www.scopus.com/inward/record.url?scp=85042210552&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85042210552&partnerID=8YFLogxK
U2 - 10.1177/1077558717703165
DO - 10.1177/1077558717703165
M3 - Article
C2 - 29148343
AN - SCOPUS:85042210552
SN - 1077-5587
VL - 75
SP - 762
EP - 772
JO - Medical Care Research and Review
JF - Medical Care Research and Review
IS - 6
ER -