"Sticker Shock" in Individual Insurance under Health Reform?

We provide estimates of changes in the annual expected price for insured medical care—defined as the sum of premiums and expected out-of-pocket payments—after the Affordable Care Act (ACA) among consumers who previously bought individual insurance. Using the best available data from the Current Population Survey (CPS) and the Medical Expenditure Panel Survey (MEPS), we find that average prices did not increase substantially in California and in states with federally run exchanges. Our central estimates based on MEPS data on out-of-pocket payments suggest that average prices would not change significantly if the lowest-priced Bronze plan were selected, whereas prices would increase from 8 to 15 percent if the second-lowest-priced Silver plan were selected. (Alternative estimates using CPS data on out-of-pocket spending suggest somewhat higher price increases.) Potentially offsetting changes in the risk premium associated with moving from pre-reform coverage to either Bronze or Silver coverage are estimated to be generally small for younger buyers, but offset price increases for some older buyers, especially older women.