The 2016 rate-increase hysteria has already started. Before you freak out, here are four things to remember about premium-hike proposals.
May 15 officially marked the start of the 2016 rate review season. What that means for Americans is that over the next month or so, newspapers and web sites across the country will start running stories with scary-sounding headlines like this:
Some Oregonians could face major insurance rate hikes next year
Health plans request double-digit premium increases
...The articles will throw a bunch of numbers around, saying that the “average” premium rate increase for a given state is expected to be X percent, followed by examples of the highest and lowest increases. There may even be a few “Company Y will actually be reducing their rates!” thrown in.
According to the McKinsey Center report, the nationwide weighted average increase is 11.7%, slightly below my 12-13% estimate. Unlike the Avalere Health report, the McKinsey study appears to be more of a true apples-to-apples comparison:
It includes all 50 states, plus DC.
It includes all Silver plans, not just the lowest-priced one.
It includes all Metal Levels as well as Catastrophic.
In fact, the only significant differences between the McKinsey Center report and mine are:
My estimate includes off-exchange ACA-compliant policies as well as exchange-based ones
My estimate attempted to look at the average change as opposed to the median change (the distinction of which, admittedly, is often difficult to remember)
Regardless, I think it's safe to say that my 12-13% estimate is on pretty damned safe ground.
With all that in mind, as of October 25th, no matter how I slice it, the national weighted average increase for 2016 seems to be somewhere between 12% - 13%.
