August 6, 2014

White House: Rates in Florida will decline for Affordable Care Act exchange plans

The Obama Administration pushed back on Florida’s report this week that consumers will pay more for health plans next year, with a White House official saying rates will drop for most silver plans in the state.

Most Floridians who buy an Obamacare health plan for 2015 will pay less in monthly premiums, White House officials said Wednesday — a rebuttal to this week's report from Florida officials saying rates will rise an average of 13.2 percent for new plans in the individual market next year.

Both analyses are mathematically correct, relying on different ways to slice the Affordable Care Act numbers with Florida’s Republican-led Legislature and governor staunchly opposed to the health law, and the White House eager to show that the law is working to bring healthcare to more Americans.

One important difference is that Florida officials in the report from the state Office of Insurance Regulation calculated an average for all health plans sold on the individual market — counting plans sold on the ACA exchange along with those that are not.

The White House, meanwhile, examined only the second-lowest priced silver plan sold on the ACA exchange in each Florida county. Those are the so-called “benchmark plans” used to calculate the amount in federal subsidies that eligible consumers can receive to help pay their monthly premiums and out-of-pocket costs, such as deductibles and copays.

That review found “an estimated 75 percent of Floridians live in areas where the second-lowest silver premium will actually fall relative to 2014,” said Tasha Bradley, a spokeswoman for the U.S. Department of Health and Human Services.

The White House analysis showed the monthly premium for the second-lowest silver plan in all Florida counties will drop by an average of 4 percent. That plan’s price will drop by 6 percent in Miami-Dade, 2 percent in Broward, and 17 percent in Palm Beach, an Obama administration official said, though the federal review also found that rates will rise by 9 percent in Monroe.

Responding to the White House analysis, Florida officials defended their methodology and said that premium changes for the second-lowest silver plan in a county were not likely to represent the average premium change for all plans in that county.

“Any assertion that overall rates are going down in Florida is false,’’ said Harvey Bennett, a spokesman for the state’s Office of Insurance Regulation, which reviews rate proposals for new health plans. “Only using the second lowest silver plan rate is misleading.’’

Several insurance companies did raise their rates in Florida for 2015, Bennett said. Eight filed average rate increases ranging from 11 to 23 percent, and three filed rate decreases ranging from 5 to 12 percent, according to the state report.

Bennett said state officials used figures provided by insurance companies of actual 2014 enrollment and projected 2015 enrollments. He said the state analysis gave more weight to the silver plans, and to companies with more enrollees and higher population areas.

An Obama administration official said its analysis weighted each county by population, and calculated premium changes for the second-lowest silver plans by county using the monthly federal subsidy amounts per county provided in Florida’s rate report.

Nearly a million Floridians signed up for health plans using the federally-run exchange for 2014. About 893,000 people or 91 percent of those Floridians receive a federal subsidy to lower their share of the premium and out-of-pocket costs, according to federal data.

Silver plans were the most popular, selected by more than 722,000 people or 73 percent of Floridians who signed up for an exchange plan. Federal subsidies are determined by a formula that uses the second-lowest silver plan in a county as the benchmark, and then factors a consumer’s age, place of residence and annual income.

Analyzing rates for the 2015 health plans can be complex given the many different plans available, and the numerous methods for aggregating and breaking down the data. But there is evidence that the health law is working to increase competition among insurers selling plans on the ACA exchange, and basic economic theory dictates that competition drives down price.

That evidence was provided in the state’s rate report, which noted that three new companies are selling plans on the federally-run exchange in Florida for 2015 — adding to the 11 insurers that offered plans on the exchange this year.

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