Remember "rate shock" and the dire warnings from Republicans about how Obamacare would cause premiums to skyrocket? Not happening in 2015. At least not in seven large cities around the country. Kaiser Family Foundation analyzed
announced premium increases in 15 states scattered across the country, and found that the highest premium increase—in Nashville, Tennessee—will be 8.7 percent, lower than the average double-digit increases historically seen. And in Denver, premiums will drop
by 15.6 percent.
"There is variation, but so far, premium increases in year two of the Affordable Care Act are generally modest," said Drew Altman, Kaiser’s President and CEO. "Double digit premium increases in this market were not uncommon in the past," Altman added.
At least two insurers will offer coverage through the marketplaces in the major city in each of the 15 states studied and D.C. Most areas will have five or more insurers, and three will have 10 or more. The study finds that insurer participation generally held stable or increased in all of the cities, with the exception of Portland, Oregon, where the number of participating insurers decreased from 10 to 8.
This is based on premiums for the second-lowest-cost silver plan in each state—that's the benchmark plan that the government uses to determine how much of a subsidy consumers who qualify can receive. How is this happening? Good old capitalism, competition in the marketplace says
co-author of the report, Larry Levitt.
"I think what we're seeing is a lot of marketing strategy," Levitt says. "Some who priced high are coming down, sometimes, dramatically, in their premiums. And some insurers who attracted a fair amount of marketshare last year are confident they can keep their enrollees, and might raise their prices."
This is great news for taxpayers—because these premiums are falling, the federal government is going to be spending less to provide these tax credits to Obamacare customers. It's also pretty great news for Obamacare and its supporters—the law isn't going to be busting the budget.