This is the first of three posts on this subject
The Affordable Care Act regulates both the individual and small group health insurance markets, yet these two markets are seldom looked at side by side. While many of the regulations governing plan design and premiums are the same, the markets serve very different populations and different health insurance carriers participate.
The data science team at Vericred analyzed premiums for the lowest cost silver plans on the individual and small group markets to see how they differ by state.* The results show that in nearly every state, the lowest cost silver plans are more expensive on the individual market than on the small group market. The only states where the individual plans are less expensive are Indiana, Ohio, New Jersey, New York, and Rhode Island. Additionally, Vermont has a combined individual and small group market, which ensures no difference in premiums. The largest differences between the individual and small group premiums are seen in Iowa and Wyoming, where the lowest cost individual silver plans cost over $300 more than small group. Small employers thinking about whether to offer group health insurance should consider the difference in premiums between the individual and small group markets that their employees will face.
* Results are similar if the median cost silver plan is used instead of the lowest cost silver plan
This is the first of three posts; in the next post, we will investigate how competition in the individual market is related to the premium difference between the small group and individual markets.