A premium guessing game: Insurers still aren't certain how risky the 2015 risk pool will be

With a year of real-world experience under their belts, insurers should, in theory, find it easier to set premiums for 2015. But because it’s no longer legal to discriminate against people with preexisting conditions, the Obamacare application doesn’t ask about health status. Which means the only data firms have is what they’ve collected from enrollees so far—and that’s not much.

“You look at your claims history when you’re setting rates, and there’s not a lot of claims history on these folks,” one industry official said.

From an actuarial perspective, a healthy 50-year-old is better than a sick 25-year-old. But for now, with no better alternative, insurers and health care wonks are simply using age as a proxy for health status. A young adult is assumed to be healthier than someone older. That’s a very broad assumption, and one that leaves much uncertainty in the calculus.

In insurance, uncertainty often translates to higher premiums. When a firm isn’t sure what it will have to spend, it tends to build in a cushion. The White House has already taken one step to prevent that scenario: It delayed the next enrollment period and the deadline for rate filings, giving insurers an extra month to take stock of who signed up this year. Rates for the federally run insurance exchanges are now due at the end of May, rather than the end of April.