WHAT? That's my new monthly premium bill? I thought it was my new German luxury car payment, or wait, is it?

Probably one of the most hotly debated items of the ACA are the premiums.  I talk to people daily who tell me how excited they are that their premiums are the lowest they have been in 11 years.  I hang up my phone and then I have the same conversation with someone in a different part of the country and they tell me that their premium increased more than the ratings of the most recent chapter of a space movie.  (insert heavy breathing and strangulation).

Yes, premiums are high and they are low; they are your parents in the 70's at a swingers party and your dad can't find the keys.  

Why you ask?  So let's break it down just tonight on the individual market - 

The individual market.   Pre-ACA, every state regulated their insurance costs in the individual market, and some states regulated the rates themselves.  To keep this somewhat basic and not too complicated, and there are variations around the country, I am focusing on underwritten rates and community rating

Age/Sex Or Underwriting Rates: Some states (TX/NJ as an example- check google for the whole list of how states regulated individual premiums) set premium rates based on age bands (i.e. 25-30; 30-35, etc.); could have added a cost for gender (Male/Female); and where you lived in the state.  All that data put into a box and shaken around would produce a rate.  What it actually did was look at actuarial tables and give you a rate based on your age, gender and where you lived (called underwriting).  At times, based on state, health questions were asked and also you could throw in smoker versus non smoker, but you get the picture.  So - if you were a 24 year old male your rate would probably be somewhat lower than a 25 year old female.  Women are giving birth and men are supermen who are invincible (i.e. - I don't need a check up, I feel GREAT!).  As we trend up in age, the costs start to shift and males are becoming more expensive and women are starting to trend lower.  No more babies and men are paying the price for being invincible in their 20's.  

Community Rating: Other states (like NY - again google it) put into law community rating, or risk pool rating.  The state would set a rate for the risk pool in the individual market and you would purchase a plan based on your county and carrier.  (crickets. . . . )  Yes, that is it.  So as you can imagine, the rates were sky high, as people bought insurance if they needed it.  So in 2005, for example, in NYC - you could purchase an HMO plan that had a referral and was an HMO network for at the high end $900-$1000 a month.  You were not rated on your demographics, you were rated on a community risk pool.

So here comes the ACA to save the day.  NY is cheering as premiums dropped drastically. like 50% - and they are still about 45%-50% lower than they were in the risk pool, in some parts of the state.  

But wait. . . .remember those states that did individual underwriting?  Well, the ACA is now pushing them towards being more inline with the community rating and adding additional mandated coverage - and what happened?  You couldn't keep the coverage you had, you were required to have additional coverage you many not want and your rates went up faster than Uncle Sal's blood pressure on Christmas Eve.  

So - before we go further, you can see where you have parts of the country saying the ACA is their savior and parts of it saying it is bankrupting them.  Remember that, as we are one country BUT we are still regulated on a state level, even with that ACA net sitting underneath us.  And not only did premiums change, the cover requirements did too - enter our friends: I'd like to introduce you the metallic family:

- Platinum (90%)
- Gold (80%)
- Silver (70%)
- Bronze (60%) 

I'll talk more about them in our employer conversation.   And I'll tell you about those percentages - they have nothing to do with Dancing with the Stars.

That is just the individual market in a quick overview.  I'll dive into employer premiums and plans and state regulations in the coming days.  Good night, sleep well and let's keep educating on healthcare, as I said before, forget the metallic family - it is a PURPLE issue.