A new report from the U.S. Department of Health and Human Services (HHS) confirms that the federally facilitated health insurance exchange, known as the Marketplace, is doing a good job of providing consumers with more affordable health insurance choices.
The June 2014 report, uses data from the 36 states that didn’t set up their own exchanges, choosing instead to let residents purchase health insurance through the federal Marketplace. People who purchased coverage through the Marketplace “paid an average of $69 per month after tax credits for silver plans and had, on average, a choice of five health insurers and 47 plans.”
The study found that states, on average, had 10 “rating areas” (i.e., separate geographical markets). Some smaller states had only one rating area; Florida was identified as the state with the most rating areas: 67 (the same number of counties in the state).
The rating areas with the largest number of issuers (an indicator of consumer choice) were located in New York and Oregon; the rating areas with the most plans available (another choice indicator) were located in Wisconsin and Florida.
Among the other findings in the report:
- Overall, consumers were able to choose from five health insurers and 47 Marketplace plans.
- An increase of one issuer in a rating area is associated with four percent decline in the second-lowest cost silver plan premium, on average.
- People who selected silver plans, the most popular plan type in the federal Marketplace, paid an average premium of $69 per month after accounting for tax credits available under the Affordable Care Act.
- Sixty nine percent of enrollees who qualified for tax credits selected Marketplace plans with premiums of $100 a month or less; 46 percent of those who qualified for tax credits had premiums of $50 a month or less.
- Nearly 70 percent of consumers who signed up for Marketplace coverage are paying $100 or less for that coverage, thanks to the availability of tax credits.
- Overall, tax credits reduced the average monthly premium from $346 to $72–– accounting for a 76 percent decrease.
The report’s authors say the data demonstrates that tax credits are working as intended to make health insurance affordable for consumers and that the Marketplace has succeeded in spurring competition for health insurance.