February 27, 2015
A new report from Milliman shows that a modest migration of employees from employer-sponsored healthcare plans to the individual market may reduce premiums on the Affordable Care Act exchanges by up to 9 percent. According to the study, the "migration of individuals from the employer-sponsored insurance market may decrease public exchange premiums to the extent the average employer-sponsored insurance claims are less than current public exchange claims." The report estimates that if 5 percent of a cross-section of employees were to move to the public exchanges and the claims of those employees were 10 to 20 percent less than the claims of the current population in the exchanges, ACA premiums would decline by 4.9 to 9.0 percent. Although there is little claims data available for public exchange participants, the migration of larger employer groups to the public exchanges is more likely to result in an increase in the average health status of individuals in the exchanges compared to the migration of those from smaller employers.