Of all the preconceived notions surrounding the Affordable Care Act (ACA), anything money related remains at the forefront. As insurance companies claim financial hits due to reduced marketplace premiums, on the other side of the spectrum lies the assumption that the ACA has caused a premium spike.
However, a recent study proves this assumption to be untrue. In a study conducted by Loren Adler and Paul Ginsburg from the Brookings Institution, the Affordable Care Act has contributed to lower premiums for those who purchase within the Marketplace.
In fact, as we enter 2017 with predicted premium rate increases, such increases are still less than what would exist sans ACA. Rates would have to exceed a 44% spike in order to come close to the amounts that would have been in place had there been no health care reform.
The ACA made a major move in 2014 with the Health Insurance Marketplace, as these exchanges not only allow for negotiations within local territories, but also provide for plans that are both affordable and provide minimum value. These premiums are merely an indicator that providers are entering the Marketplace and allowing for more steady competition. Sure, titans like UnitedHealthcare have taken umbrage to this environment, but smaller companies (and even larger ones) are moving forward to provide affordable insurance.
While the Congressional Budget Office’s 2009 predictions for 2016 premium rates fell below 20%, this was all before the ACA came into effect a year later. Still, it’s certainly a feather in the ACA’s hat, as early predictions for 2018 also suggest that premiums will still be lower thanks to Marketplace.
The bigger question is what will happen come 2017 should Donald Trump be elected President and immediately repeal the ACA? The report already estimates that premium rates would be 30-50% higher without the ACA. There’s certainly reason for concern. To read more from the Brookings Institution’s findings, click here.