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Study Sheds Light on Insurance Increases Before Health Care Law

By Rebecca Adams, CQ HealthBeat Associate Editor

June 5, 2014 -- In 2010, the year that the health care law passed, insurance premium rate increases for individual insurance ranged from 3 percent in Idaho to 21.8 percent in Nebraska, according to a recent study from The Commonwealth Fund.

The report is by Jonathan Gruber of the Massachusetts Institute of Technology, who has advised the Department of Health and Human Services on implementation of the law (PL 111-148, PL 111-152).

Gruber analyzed data from the three years before the law passed in order to provide context about the state of the individual health insurance market.

Health insurance rates for people buying coverage for themselves grew an average of 10 percent or more a year during those three years, Gruber found.

In 2008, rate increases ranged from 2.8 percent in Iowa to 14.7 percent in Wisconsin, according to Gruber's analysis. In 2009, increases ranged from 4.1 percent in New Jersey to 20.1 percent in Connecticut.

"This report provides a baseline for evaluating the effects of these changes on premium costs, and reminds us that before the law many families buying coverage on their own saw their premiums skyrocket even when their plans didn't adequately cover the care they needed," said Commonwealth Fund President David Blumenthal.

"The individual insurance market has always been volatile, and people with individual coverage often experienced large premium increases," said Gruber, who noted that data about increases has been rare. "While there are some limitations to these data, they provide a baseline snapshot of the market before passage of the Affordable Care Act to help track whether the law's marketplaces are providing better protection at a cost that consumers, and the federal government, can afford."

Gruber said in a call with reporters that the rationales for the increases are not known.

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