VeriStat: Silver Premiums on the Individual Market vs. the Small Group Market: Part III

This is the third 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.

In our last post, we investigated how competition in the individual market is related to the premium difference between the individual and small group markets. In this post, we will examine how the premium difference between the individual and small group markets has changed over time.

The data science team at Vericred analyzed the difference in premiums between the lowest cost plans on the individual and small group markets for each metal level to see how the premium difference between these markets has changed over the past few years.* The results show that the individual market was slightly more expensive than the small group market in 2016 and that the individual market became increasingly more expensive than small group market for all metal levels in 2017 and again in 2018. The individual market is showing signs of growth for 2019 after a large number of exits in 2018. Consumers and policy makers should take note as 2019 rate filings are released to see if this trend of divergence in premiums between the individual and small group markets continues or begins to stabilize.

* Trend over time is similar, but less extreme, if the median cost plans for each metal level are used instead of the lowest cost plans

Veristat - Median Difference By Metal Level-01