The Government Accountability Office has released a report on the range of average annual premiums for private health insurance policies in the small group market by state in early 2013. Here are five key things to know from the report.
1. Americans who obtain health coverage through the small group market are generally employees of small employers and their dependents. The Patient Protection and Affordable Care Act defines small employers as those with 100 or fewer employees.
2. Until 2016, states have the option of defining small employers as those employing 50 or fewer people on average during the preceding calendar year. Businesses with fewer than 50 employees are exempt from the PPACA's employer mandate, which requires companies to offer health insurance to their workers or pay a penalty of $2,000 per employee. Businesses with 50 to 99 employees must comply with the mandate starting in January 2016.
3. The PPACA also changes the requirements for small group health plans and therefore could affect premiums. For instance, as of January 2014, health insurers may no longer factor in the average health status of a small group to set premium rates. The PPACA also restricts how much insurers can vary premiums based on age and tobacco use within an employee group. Furthermore, small group plans must now cover minimum essential health benefits. "As a result, insurers may have changed, and may continue to change, the way premiums are calculated for the small group market," the GAO report states.
4. At the request of Sen. Orrin Hatch (R-Utah) of the Senate Finance Committee, the GAO has examined the range of average premiums for the small group market during the first quarter of 2013, which can serve as a baseline to determine how the PPACA affects small group policy premiums. The average annual premiums per covered life for small group market products vary between network provider types and by state. The average premium for the product with the median average annual premium for all network provider types varies from $1,753 in Washington to $7,691 in Alaska, according to the GAO. The premiums can also vary widely within states "for a number of reasons, including significant differences in the services covered, cost sharing features selected, and the factors considered when insurers set the premium rates for each small employer," according to the report.
5. The GAO is expected to publish a report on 2014 premium prices at the end of this year, which will reveal how the PPACA has affected small group premiums so far, with the report on 2013 premiums acting as a baseline. Republicans have predicted premiums will increase significantly under the PPACA, while Democrats have dismissed those projections as exaggerated, according to a report from The Hill.
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