Beginning January 1, 2014, PPACA required that health insurance plans, whether sold on or off an exchange, offer a comprehensive package of items and services—known as essential health benefits. At the same time, PPACA required most individuals to maintain minimum essential coverage for themselves and their dependents or pay a tax penalty—this requirement is commonly referred to as the individual mandate. Individuals who do not have other insurance coverage, such as from an employer, may satisfy this requirement by maintaining coverage under health plans offered in the individual market. Certain PPACA provisions affected the way individual market plans are marketed for consumers. In particular, PPACA standardized health insurance plans into four “metal” tiers of coverage—bronze, silver, gold, and platinum—which reflect out-of-pocket costs that may be incurred by an enrollee. Bronze plans tend to have the lowest premiums but leave consumers subject to the highest out-of-pocket costs when they receive health care services, while platinum plans tend to have the highest premiums and the lowest out-of-pocket costs. The generosity of each metal tier is measured by the plan’s actuarial value (AV). AV is expressed as the percentage of covered medical expenses estimated to be paid by the insurer for a standard population and set of allowed charges for in-network providers. The higher the AV percentage, the lower the expected enrollee cost sharing. For example, for a plan with an AV of 70 percent, it is expected that, on average, enrollee cost sharing under that plan will be 30 percent of the cost of care, while for a plan with an AV of 80 percent, it is expected that, on average, enrollee cost sharing under that plan will be 20 percent of the cost of care. PPACA includes standards related to AV and assigns a specific actuarial value to each of the four metal tiers: bronze (AV = 60 percent); silver (AV =70 percent); gold (AV = 80 percent); and platinum (AV = 90 percent). If an insurer sells a plan on an exchange, it must at least offer one plan at the silver level and one plan at the gold level. Insurers are not required to offer bronze or platinum versions of their plans in order to participate on exchanges. PPACA provisions also affected the way individual market plans are priced for consumers. For example, PPACA prohibited health insurers from varying health insurance plan premiums on the basis of factors other than age, geographic location and tobacco use—for which limits were established. For example, the age factor used to adjust premiums may vary by no more than a 3 to 1 ratio for adults aged 21 and older and must use a uniform age rating curve to specify the rates across all adult age bands. Premium variation based on health status or gender was effectively prohibited. PPACA does not require insurers to offer plans through the state or federal exchanges. Similarly, it does not require consumers to purchase plans through the exchanges; however, there are incentives for many consumers to do so. For example, certain consumers earning from 100 to 400 percent of the federal poverty level are eligible to receive premium tax credits that can reduce premium costs, but only for plans purchased through an exchange. Similarly, certain consumers earning from more than 100 percent to 250 percent of the federal poverty level are eligible to receive additional subsidies that help them pay for the out of pocket costs, but only for silver plans purchased through an exchange. Also, the SBEs and FFE allow consumers to comparison shop for plans and enroll in a plan online, whether or not consumers are eligible for premium tax credits or cost sharing subsidies. Individual market consumers in every county in our analysis had access to a variety of plan options each year, and the number of plans available to consumers generally increased from 2014 to 2015. For example, in 28 states for which we had reliable data for all plans (offered either on or off exchanges), the percentage of counties for which six or more plan options were available to consumers increased from 2014 to 2015 for three of the metal tiers—bronze, silver, and gold—and in 2015 consumers in every county in these states had access to six or more plans in each of these three metal tiers. Further, in 2015, among the 38 states where we focused our analysis on plans offered on an exchange, we found that consumers in 88 percent of the counties had access to six or more bronze exchange plans, consumers in 94 percent of counties had access to six or more silver exchange plans, and consumers in 71 percent of counties had access to six or more gold exchange plans. Not all consumers had access to platinum plans, however, the availability of platinum plans generally also increased from 2014 to 2015. (See table 1.) We also found that the lowest-cost plan options available in a county were available on an exchange in a majority of the counties included in our analysis. For example, among the 1,886 counties in the 28 states for which we had sufficiently reliable data for plans both on and off an exchange, we found that the lowest-cost silver plan option for a 30-year old was available on an exchange in 63 percent of the counties in 2014 and in 81 percent of the counties in 2015—an increase of 18 percentage points. The premiums for the lowest-cost plan options available in each state included in our analysis varied significantly from state to state. For example, in Arizona (a state for which the lowest-cost premiums were among the lowest in the country) the lowest-cost silver plan options for a 30-year-old were $147 per month in both years for plans both on and off an exchange. By contrast, in Maine (a state for which the lowest-cost premiums were among the highest in the country) the lowest-cost silver plan options for a 30-year-old were $252 in 2014 and $237 in 2015 for plans both on and off an exchange. Based on the full premium costs, on an annual basis in 2015 a 30-year-old in Arizona who was not eligible for a premium tax credit could have spent $1,082 less on the lowest-cost silver plan available to them compared to what the same consumer in Maine could have spent on the lowest-cost silver plan available to them. The findings were similar when we conducted our analysis of plans offered on exchanges in 38 states. Because each state in our analysis uses a uniform age rating curve to specify the rates across all adult age bands, each state would have the same relative differences in premiums for all adult age categories. (See table 2.) The premiums for the median-cost plan options available in each state included in our analysis also varied widely. For example, in both years Hawaii had among the lowest median premium costs for silver plans offered to a 30-year-old either on or off the exchange—$217 per month in 2014 and $180 per month in 2015. By contrast, in both years Colorado had among the highest median premium costs for such plans—$343 per month in 2014 and $369 per month in 2015. In most states, the costs for the minimum and median premiums for silver plans increased from 2014 to 2015. For example, in the 28 states included in our analysis, from 2014 to 2015 the minimum premium values for silver plans available to a 30-year-old increased in 18 states, decreased in 9 states, and remained unchanged in 1 state. Similarly, in these same states the median premium values for silver plans available to 30-year-old increased in 19 states, decreased in 8 states and remained unchanged in 1 state. Further, in general, states with higher than average minimum premiums in 2014 were more likely to have declines in 2015 premiums than the states with lower than average minimum premiums in 2014. For example, the average minimum monthly premium value for the silver plan option for a 30-year-old in 2014 in the 28 states included in our analysis was $193 for plans offered on or off an exchange. Of the 13 states with 2014 premiums for this group of consumers that were greater than $193, eight had lower minimum premiums in 2015. Of the 15 states with 2014 premiums for this group of consumers that were less than $193, only one state had a lower minimum premium in 2015. When analyzing premium costs at the county level, we found that from 2014 to 2015, premiums were more likely to increase than decrease. For example, our analysis of the minimum premiums for silver plans in states where we analyzed data on plans offered either on or off exchanges found that premiums for a 30-year-old increased by 5 percent or more in 51 percent of the counties. During the same time period, premiums for these plans decreased by 5 percent or more in nearly 17 percent of the counties, and increased or decreased by less than 5 percent in 32 percent of the counties. The findings were similar when we repeated this analysis using the median premium value in each county and when we limited the analysis to plans offered on exchanges. Because each state in our analysis uses a uniform age rating curve to specify the rates across all adult age bands, each state would have the same relative differences in premiums for all adult age categories. (See table 3.) We found that the range of premiums—from the lowest to highest cost— available to consumers differed considerably for the states included in our analysis. For example, our analysis of premiums for silver plans available to a 30-year-old either on or off an exchange found that the ranges of premiums available were much more narrow in Rhode Island compared to Arizona. In Rhode Island, 2014 premiums for plans ranged from a low of $241 per month to a high of $266 per month, a difference of 10 percent, and in 2015 ranged from a low of $217 per month to a high of $285 per month, a difference of 32 percent. By contrast, in Arizona, 2014 premiums for these plans ranged from a low of $147 per month to a high of $508 per month, a difference of 244 percent, and in 2015 ranged from a low of $147 per month to a high of $545 per month, a difference of 270 percent. In addition, between 2014 and 2015, the range from the lowest- to highest-cost premiums available by state became wider in 18 out of the 28 states included in this analysis. The findings were similar when we conducted our analysis for plans offered on exchanges in 38 states. We also found that the percentage difference between the minimum and maximum premium in the states included in our analysis was generally higher in states where the average number of plans available per county was higher. For example, in both years, states with an average of 30 or more plans per county had among the widest ranges between the lowest and highest premium amounts. By contrast, states with an average of 15 or fewer plans per county had among the narrowest ranges between the lowest and highest premium amounts. (See table 4.) Because each state in our analysis uses a uniform age rating curve to specify the rates across all adult age bands, each state would have the same relative differences in premiums for all adult age categories. When analyzing ranges at the county level, we found that among all the counties in our analysis, the range of premiums available for different plan options generally widened from 2014 to 2015. For example, among the 1,886 counties in the 28 states for which we had sufficiently reliable data on all plans offered on or off an exchange, we found that the range in silver plan premiums for a 30-year-old in 2015 was wider in 79 percent of the counties compared to 2014. The findings were similar when we conducted our analysis for plans offered on exchanges in 38 states. In the interactive graphic linked to below, we provide files showing the range of health insurance premiums, by county, that were available to selected categories of consumers for exchange plans and all plans (whether or not they were available on an exchange)—for both 2014 and 2015. Twenty-five states include complete sets of data for both years. Twenty-four states include partial data if certain date elements were not sufficiently reliable to report. For example, in a state where we had information for fewer than 70 percent of exchange plans in a given year, we do not report any values for exchange plans for that state in that year. We do not include any data for the state of Washington or the District of Columbia because the data were either not available or not sufficient in both years. See figure 1 for an illustration of premium information available via the interactive map available at the website. This graphic can be viewed by linking to the interactive map found at http://www.gao.gov/products/GAO-15-687. We received technical comments on a draft of this report from the Department of Health and Human Services and incorporated them as appropriate. As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies of this report to the Secretary of Health and Human Services and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staffs have any questions regarding this report, please contact me at (202) 512-7114 or dickenj@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix II. Appendix I: States Included and Excluded from GAO’s Analyses offered on an exchange for facilitated exchange (FFE) or state based “all plans” analyses exchange (SBE) exchange(Y or N) (Y or N) N offered on an exchange for facilitated exchange (FFE) or state based “all plans” analyses exchange (SBE) exchange(Y or N) (Y or N) We excluded 2014 data for Virginia from our analyses because, even though the percentage of plans that reported premiums data was greater than 70 percent of the universe of plans in 2014, there were several outliers that made the data unreliable for this year. In addition to the contact named above, individuals making key contributions to this report include Gerardine Brennan, Assistant Director; Todd Anderson; George Bogart; Matthew Byer; and Laurie Pachter.

Summary: PPACA, as of 2014, changed how insurers determine health insurance premiums and how consumers shop for individual market health insurance plans. For example, PPACA prohibited insurers from denying coverage or varying premiums based on consumer health status or gender. At the same time, PPACA required health plans to be marketed based on their metal tiers (bronze, silver, gold, and platinum), which helps consumers compare the relative value of each plan; it also required the establishment of health insurance exchanges in each state, through which consumers can compare and select from among participating health plans. GAO was asked to examine variation in the health plan options and premiums available to individuals under PPACA, and how the options available in 2014 compared to those in 2015. GAO examined: (1) the numbers of health plans available to individuals and how they changed from 2014 to 2015, and (2) the range of health insurance premiums in 2014 and 2015, and how they changed for individuals in each state and county for selected consumers. GAO analyzed data from the Centers for Medicare & Medicaid Services (CMS); reviewed applicable statutes, regulations, guidance, and other documentation; and interviewed officials from CMS. Comparisons across years were conducted for states that had sufficiently reliable data in both years—including comparisons of plans offered either on or off an exchange in 28 states (1,886 counties) and comparisons of plans offered only on an exchange for 38 states (2,613 counties) although GAO is reporting some data on 49 states. As of 2014, key provisions of the Patient Protection and Affordable Care Act (PPACA) resulted in the establishment of health insurance exchanges in each state and changed how insurers determined health insurance premiums. Individual market consumers generally had access to more health plans in 2015 compared to 2014, and in both years the lowest-cost plans were available through exchanges in most of the 1,886 counties GAO analyzed in the 28 states for which it had sufficiently reliable data for plans offered either on or off an exchange. In addition, consumers in most of the counties analyzed had six or more plans to choose from in three of the four health plan metal tiers (bronze, silver, and gold) in both 2014 and 2015, and the percentage of counties with six or more plans in those metal tiers increased from 2014 to 2015. Consumers had fewer options regarding platinum plans, although the availability of platinum plans generally also increased from 2014 to 2015. The lowest-cost plan available in a county was available on an exchange in most counties. For example, among the 1,886 counties analyzed, GAO found that the lowest-cost silver plan for a 30-year-old was available on an exchange in 63 percent of these counties in 2014 and in 81 percent of these counties in 2015—an increase of 18 percentage points. The range of premiums available to consumers in 2014 and 2015 varied among the states and counties GAO analyzed. For example, in Arizona the lowest-cost silver plan option for a 30-year-old was $147 per month in both years, but in Maine, the lowest-cost silver plan options for a 30-year-old were $252 in 2014 and $237 in 2015. In the 28 states included in GAO’s analysis, from 2014 to 2015 the minimum premiums for silver plans available to a 30-year-old increased in 18 states, decreased in 9 states, and remained unchanged in 1 state. At the county level, GAO found that premiums for the lowest-cost silver option available for a 30-year-old increased by 5 percent or more in 51 percent of the counties in the 28 states. GAO also found that the range of premiums—from the lowest to highest cost—differed considerably by state. For example, in Rhode Island, 2014 premiums for silver plans available to a 30-year-old either on or off an exchange ranged from a low of $241 per month to a high of $266 per month, a difference of 10 percent, and in 2015 ranged from a low of $217 per month to a high of $285 per month, a difference of 32 percent. By contrast, in Arizona, 2014 premiums for these plans ranged from a low of $147 per month to a high of $508 per month, a difference of 244 percent, and in 2015 ranged from a low of $147 per month to a high of $545 per month, a difference of 270 percent. An interactive graphic reporting by state and county the minimum, median, and maximum premium values for all individual market plans (either on or off the exchange) and for exchange-only plans, is available at http://www.gao.gov/products/GAO-15-687 . It includes either data for both years, or partial data (e.g., data for one of the two years) for 49 states. GAO received technical comments on a draft of this report from the Department of Health and Human Services and incorporated them as appropriate.