What death spiral?

January 16, 2014

Premium increase unlikely in 2015.

With all the technological setbacks and glitches of healthcare.gov at the end of 2013, and the clock ticking on open enrollment, concerns about low enrollment of the young and healthy have been abundant.

However, a recent study by the Kaiser Family Foundation (KFF) downplayed concerns that low enrollment of young adults might lead to a "death spiral.”

The study stated that under a worst-case scenario in which only 25% of enrollees are age 18 to 34, insurers would have to raise premiums by 2.5% in 2015. Similarly, if young adults represent 33% of enrollees, premiums would be raised by 1.1%.

With the addition of ACA transitional policies that allow insurers to keep premiums low as the risk pool settles in first three years, it's unlikely that premiums will increase in 2015.