2016 Premium Increases in the ACA Marketplaces

Not Nearly as Dramatic as You've Been Led to Believe

Research counters many earlier predictions of widespread double-digit premium rate increases for consumers purchasing health insurance in the state marketplaces in fall 2015.

In brief

Researchers analyzed final approved rates and found a 4.3 percent increase in the average premium of the lowest-cost silver plan across 20 states and D.C. They also analyzed the difference in 2015 vs. 2016 premiums and provide detailed information for each insurer participating in the marketplaces studied.

Key Findings

  • The average premium of the lowest-cost silver plan decreased in six states and D.C.

  • The average premium of the lowest-cost silver plan increased by less than 5 percent in five states, increased between 5 and 10 percent in five states, and increased by more than 10 percent in just four states.

  • The researchers observed that regions with lower 2015 premiums tended to see larger cost increases in 2016 than states that began with higher 2015 baseline premiums.

Conclusion

The authors suggest that many insurers may have priced aggressively early on in order to gain market share, then modified that strategy this year. The authors forecast that it will take a few more years for insurance risk pools and premiums to stabilize.     

About the Grantee

The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. Visit the Urban Institute’s Health Policy Center for more information specific about its staff and its recent research.