ACA plan premiums down 1st time since law took effect

Desiree Burns
October 14, 2018

Health insurance premiums in the 39 states that use HealthCare.gov - including CT - will fall 1.5 percent on average for the most commonly purchased plans in 2019, marking the first time that rates have dropped since the 2010 health care law was implemented.

Premiums for the second-lowest cost silver plans in the Affordable Care Act federal exchanges will drop by an average of 1.5% in 2019, CMS said Thursday. "These premium reductions along with increased issuer participation strongly suggest that the numerous actions taken by the Trump administration to stabilize the market are working", the agency said in a statement.

Cynthia Cox, director of health reform and private insurance at the Kaiser Family Foundation, said some Trump administration actions have probably helped stabilized the exchange.

But those claims require some context. "[The Affordable Care Act] needs to change".

Under President Donald Trump, the Department of Health and Human Services (HHS) has been giving states more freedom to experiment with different health care models to bring costs down.

"Individual market insurers are now so profitable that it would be hard for many companies to justify a rate increase", said Cynthia Cox, an insurance expert at the Kaiser Family Foundation.

In August, HHS gave guidance to insurers on how to deal with the loss of funding, and has also given 30 states and the District of Columbia grants worth $8.6 million to improve the local health care markets.

She also pointed to the administration's move to expand short-term plans as a mitigating factor, arguing that the availability of such plans has not raised premiums as many predicted.

The enrollment will take place from November 1 to December 15 and those who want to save money in premiums need to switch to a different plan along with different network of doctors.

Nor does the rate analysis cover two other main tiers of coverage that are available to ACA customers. The benchmark premiums for midlevel "silver plans" are used to calculate the subsidies available to consumers, so when benchmark premiums go down, subsidies may also go down.

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The average premium for a benchmark silver plan in 2019 will be $406 a month, slightly below the $412 average for 2018 - but still significantly higher than the $240 average for 2016 or the $301 average for 2017. When the exchanges opened, for example, "we were told premiums would go down, and the reality is they didn't".

The biggest drop is a 26.2 percent decrease in Tennessee. These premiums were calculated for a 27-year-old single nonsmoker. North Dakota and DE are expected to see 20.2 percent and 16.1 percent increases respectively on the second-lowest silver plan, the highest of all the states, according to CMS data. The highest cost is $709 in Wyoming.

More than 20 payers are entering or reentering the ACA marketplace and 29 payers are expanding their footprint in the exchanges in 2019.

Verma did not announce a numerical goal for the coming enrollment period.

Verma said Thursday that average premiums would have increased for 2019, not decreased, if insurers expected that to happen. He cut off billions of dollars in cost-sharing payments to insurers last October. And he boasted at a political rally last week that he had "mostly obliterated Obamacare".

During a call with reporters, Verma said the ACA is still a broken piece of legislation that Congress should replace. But some actions by the Trump administration have pleased insurers and made the marketplace more attractive to them.

CMS said the average individual market premiums in states in the federal exchange more than doubled between 2014, when the exchanges began, and 2017.

Premiums generally rise with age and, in some states, can exceed $1,000 a month for people in their 50s and 60s.

But Verma defended the expansion of short-term, limited duration plans as an affordable option for people who can't afford Obamacare plans.

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