Health insurance premiums: the domino effect

If there was ever a good example of the fickle nature of the health insurance markets, witness what has occurred in the individual health insurance over the last few years. If you own an individual insurance policy and your household income is at or above 400 percent of the federal poverty level, expect to pay dearly for your coverage. The 400 percent represents the eligibility limit for ACA premium subsidies (not to be confused with cost sharing subsidies) and is $94,200 in 2017 for a family of four.  Individuals that are just below this threshold — say, 399 percent — would get roughly two-thirds of their premium covered by the federal government. If I’m at or above the threshold, I pay the full freight.  Translated to real dollars, a person in their 50s with a family of four and a household income of $95,000 will pay about $25,000 per year in the state of Illinois for a silver plan. In 2013, that same premium was about $9,000.

While I do not have deep insight into how our individual health insurance carriers are pricing their plans, it is becoming increasingly clear the markets are reacting in a big way to any level of uncertainty. This uncertainty and subsequent pricing policy extends to both “on-exchange” and “off-exchange” plans, as well as the small group market.