Insurance Coverage Data Creates Baseline for Affordable Care Act's Impact
With more than 10 million Americans newly insured so far under the Affordable Care Act, enormous changes to insurance coverage in the individual and Medicaid markets, described in this recent study in the New England Journal of Medicine, are occurring. At the same time, major changes to rating practices in the small group market are also taking place, prompting concerns about the effect of the Affordable Care Act on premiums for the large and small group markets.
Newly available 2013 data from the Agency for Healthcare Research and Quality (AHRQ) on the cost and availability of employer-sponsored health insurance show us where we can set the baseline in the year before major provisions of the Act took effect. The majority (58 percent) of non-elderly Americans have employer-sponsored coverage, making this category of insured individuals an important bellwether for health policy trends.
AHRQ's data come from the Insurance Component of our Medical Expenditure Panel Survey (MEPS), a group of large-scale surveys of individuals and families, medical providers, and employers across the United States. The MEPS Insurance Component includes responses from 39,216 private sector establishments with single and multiple locations; the response rate across all establishments in 2013 was 74.6 percent. It also provides detailed information on insurance coverage, including data on costs for employee-plus-one coverage, for example. While other sources (e.g., the Kaiser Family Foundation and Health Research and Educational Trust) provided earlier estimates, AHRQ's data and large sample allow for more precise and State-level estimates.
Nationally, premiums for employer-sponsored health insurance rose by 3.5 percent for singles and couples and by 3.6 percent for families in 2013, MEPS data showed. The increases are slightly higher than in 2012, but less than half of that seen in 2010 and 2011, when premiums rose by more than 8 percent. (The infographic below provides data on premium increases for single, employee-plus-one, and family coverage).
Source: Crimmel, B.L. Selection and Costs for Employer-Sponsored Health Insurance in the Private Sector, 2013 versus 2012. Statistical Brief #445. July 2014. Agency for Healthcare Research and Quality, Rockville, MD. http://meps.ahrq.gov/mepsweb/data_files/publications/st445/stat445.shtml.
Many factors affect the rate of growth of health insurance premiums, and although the reasons for the very slow growth in employer-sponsored premiums over the past two years are not fully understood, it is likely that no single factor is fully responsible. Contributing factors likely include the lingering effects of the recent recession on demand for services, greater oversight of premiums in the small group market, and, perhaps, early returns on a reorientation toward value and not volume. AHRQ is working on developing better evidence about the factors contributing to the slowdown in health care cost growth.
While overall insurance premium growth at the national level was modest across the board, premiums faced by consumers and employers varied from State to State. Premiums were above the national average in some States, such as New York and Illinois, and were lower than average in North Carolina, Georgia, and Michigan. More State-level data can be found here.
Variations in premiums across States are affected by a number of factors, including wage levels, the supply of health care resources and the prices paid for them, the extent of competition among providers and insurers, and the generosity of plan benefits and cost sharing. AHRQ is further exploring the factors affecting variation in premiums across States.
Having more than 10 million newly insured Americans under the Affordable Care Act is a tremendous step forward. The many changes in health care financing raise the stakes on monitoring and understanding changes in insurance premiums. That's why an established data resource such as MEPS' Insurance Component is so valuable. Providing this consistent, reliable source of data on how the law is performing will give us the insight we need to inform future policy decisions.
Richard Kronick, Ph.D., is Director of the Agency for Healthcare Research and Quality.
Page originally created August 2014