By Shelby Livingston
July 2, 2018 - Modern Healthcare
More health insurance exchange members paid their
first-month premiums in 2018 than in 2017, despite fewer sign-ups during open
enrollment, according to CMS data released Monday.
Of the nearly 11.8
million people who signed up for 2018 coverage through the federal and state
health insurance exchanges, a little more than 10.6 million paid their premiums
for the first month and had an active policy as of February 2018. The rest—about
9%, or 1.1 million people—who chose a plan or were automatically enrolled during
open enrollment did not pay first-month premiums and dropped off the insurance
rolls.
The number of people who paid their premiums was slightly higher
in 2018 than in 2017, despite fewer people signing up for coverage this year.
About 10.3 million people out of 12.2 million who signed up for a 2017 exchange
plan paid their premiums for the first month of coverage.
As was the case
in prior years, more enrollees are likely to drop coverage throughout the year.
The CMS said 8.9 million people remained in exchange plans by the end of 2017.
Most of those who drop exchange coverage do so because they are instead enrolled
in a health plan through their employer, Medicare or Medicaid.
The
percentage of enrollees who receive financial assistance to pay for premiums
rose in 2018 to 87%, compared with 84% in 2017. About 9.2 million of those still
enrolled in 2018 coverage receive an advance premium tax credit to help
subsidize the cost of monthly premiums. The tax credits are available to people
with incomes between 100% and 400% of the federal poverty level.
Meanwhile, about 5.6 million, or 53%, of enrollees received a
cost-sharing reduction subsidy available to those who make less than 250% of the
poverty level and enrolled in a silver plan. Even though the Trump
administration ended the cost-sharing reduction payments late last year,
insurers are still required to lower the deductibles and copayments for eligible
members.
The CMS also said enrollees paid an average monthly premium of
$597 in February before taking into account tax credits—an increase of 27% over
the average premium in 2017. The average tax credit totaled $520 per month, up
39% over the size of the credit in 2017.
The size of tax credits
available to eligible enrollees spiked in 2018 because of the way state
regulators and health insurers handled the federal government's decision to end
cost-sharing payments. Insurers in many states loaded a surcharge attributable to the lost cost-sharing
reductions into silver plan premiums, which subsequently increased the
amount of the federal premium tax credit available for most enrollees. Some
exchange shoppers were able to find zero-premium bronze plans or lower-cost gold
plans as a result.
Still, enrollees who weren't eligible for financial
assistance were forced to stomach large premium increases. Another report
released Monday by the CMS compared enrollment among subsidized and unsubsidized
members enrolled in coverage through the individual market both on and off the
exchanges. Only people who enroll in coverage through the exchange are eligible
for a premium tax credit.
Unsurprisingly, the CMS found that most of the
people who dropped their insurance between 2016 and 2017 did not receive premium
tax credits to subsidize the cost of their monthly premiums.
According
to the agency, the average monthly enrollment among unsubsidized members
declined by 1.3 million, or 20% from 2016 to 2017, while enrollment among those
receiving premium tax credits decreased just 3%, or 223,000 members. Average
monthly premiums in 2017 increased 21% over 2016.
In 2017, an average of
13 million people were enrolled in coverage through the individual market,
compared with 14.5 million in 2016.