PwC: Even ObamaCare’s Gold Exchange Plans Cost Less than Employer-Based Coverage

health-insurancePricewaterhouseCoopers’ Health Research Institute has just published another piece of research suggesting that many employers will be dropping health benefits and dumping employees into ObamaCare’s health-insurance exchanges. Employer-sponsored health plans pay about 85 percent of healthcare costs with the remainder paid by the employee. In other words, the average employer-based plan falls between the gold (80%) and platinum (90%) levels created under the 2010 law. Comparing premiums for plans offered on ObamaCare exchanges across the country:

Across the board, at every level, average exchange premiums are lower than this year’s average premiums for employer sponsored coverage. The average median premium for gold plans is 8% lower than the national average employer premium. When examining the average of the lowest premiums for gold plans the gap is 27 percent.

In 2014 health insurance plans offered on the ACA’s 51 new exchanges are on average, comparable to, or lower priced than, similar employer-based plans. In addition, most exchange shoppers have a wider variety of plans than the typical employer-based offering. The tradeoff may come in provider choice.

(PwC Health Research Institute, Health Insurance Premiums: Comparing ACA Exchange Rates to The Employer-Based Market)

Comments (11)

Trackback URL | Comments RSS Feed

  1. Diane says:

    If they offer similar coverage and cost less, this doesn’t seem like a terrible outcome for the people affected. I am more worried about people like some of my friends and family, whose options on the Obamacare exchanges are nothing but inferior coverage for more money.

    • A. Goodwin says:

      Good point Diane! However, I think the problem is the inferior coverage that costs less, not necessarily more. The system is muddled and kinks have a very long time before they can work themselves out. Thus, while it may cost less in some instances, the new health care system is completely inefficient, costing less BUT offering lower quality.

  2. Perry says:

    But what happened to superior coverage for less money??????

  3. Mitch says:

    Employers dumping coverage was expected, but do you think that exchange premiums will stay lower than employer sponsored premiums?

  4. Bart I. says:

    This is not a valid comparison without also looking at the provider networks offered. A platinum plan that covers 90 percent of an unrealistically low reimbursement isn’t worth much. The silver-gold-platinum regime seems to be a gimmick to give the illusion of choice. If these were retail manufacturers I’d think they were doing it simply to grab more shelf space.

    • John R. Graham says:

      Thank you. McKinesy has previously reported that Obamacare exchange plans have narrow or very narrow networks.

      I think that there will be a difference between narrow networks on Obamamacare exchange plans versus selective contracting of providers by employer-based plans.

      Because ObamaCare plans are motivated to recruit healthy individuals, they will offer lower networks based solely on fees, to keep premiums low.

      Employer-based plans are more likely to shrink their networks by selecting the highest quality providers for their employees.

  5. Laura says:

    These premiums are going to fluctuate, it will be some time before we get a clear picture of how these exchanges are performing.

  6. kingstu says:

    Headlines that read “Obamacare is Working, Premiums are Lower…” are misleading at best. I can give you much lower premiums…your network will have one under performing hospital and one doctor group, if you go out of network your coverage will be 70% with 30% out of pocket.

    How does that lower priced plan sound?

  7. Vicki Byars says:

    I have begun to wonder if employers will consider dumping coverage to avoid all the compliance that comes with offering ERISA and ACA compliant plans?

    • John R. Graham says:

      I think that is an important factor. The regulatory burden is not going to get any easier, and companies may seek advantage by dropping the costs and the risks.

  8. Ilse says:

    Short Term Support: Australian Personal Loans Bad Credit arranged at Australian Personal Loans
    Bad Credit is usually short-term and available only for 90 days not fake generally, though,
    if all loans with a child are demand loans meaning there is no specified repayment schedule and total below
    $10,000, the parent need charge no interest.