Exchange Plan Premiums Cheaper than Comparable Employer Plans
The reasonableness of prices for health insurance is in the eye of the policyholder.
A new report from the Urban Institute, the Washington-based think tank, says, on average, individual health plans sold on state and federal health insurance exchanges are cheaper than comparable health plans offered by employers to workers.
Researchers from the group compared the average monthly premium for the second-lowest silver level plan sold over state and federal health insurance exchanges in 2016 with a comparable individual employer-sponsored health plan the same year. Nationally, exchange plans were on average 10 percent cheaper than employer-sponsored plans—$464 per month compared with $516 per month. Exchange plans were cheaper than employer-based plans in 39 states and the District of Columbia and were more expensive than employer-based plans in 12 states.
In Minnesota, the average monthly premium for the second-lowest silver level health plan sold over the state’s insurance exchange, MNsure, was 16 percent lower than a comparable employer-sponsored health plan for individual employees last year. It was $410 versus $489.
The gap was even bigger in Minneapolis, where the second-lowest silver level health plan was 25 percent cheaper than a comparable employer-sponsored health plan—$375 per month versus $499 per month.
The researchers attributed the differences in premiums to the size of the provider network available to policyholders.
“Marketplace insurers also tend to offer narrower provider network plans than their employer-based counterparts, with the more limited networks leading to significantly lower premiums in many cases,” the researchers said.
To learn more about trends affecting state and federal health insurance exchanges nationally and in Minnesota, read “How Has Minnesota's Health Insurance Exchange Performed?” in Twin Cities Business.