By Susannah Luthi
October 11, 2018 - Modern Healthcare
Premiums for benchmark silver plans on the federal
individual market exchanges will drop in 2019, marking the first decrease since
the Affordable Care Act was implemented, CMS Administrator Seema Verma announced
on Thursday.
Verma attribued the 1.5% overall drop to looser
regulations, the Trump administration's market stabilization rule and the seven
1332 State Innovation Waiver approvals that launched reinsurance
programs.
Tennessee will see the sharpest premium decline, as average
monthly premiums for silver plans fell more than 26% from more than $600 last
year to $449. North Dakota had the greatest increase, with average premiums
rising more than 20% from $312 per month to $375. Sixteen of the 39 states using
the federal exchange will see declines, two states will have no change, and the
majority of the remaining states will face marginal, single-digit
increases.
Verma dismissed the idea that President Donald Trump's cut-off
last year of the cost-sharing reduction payments hurt the market, although the
action was followed by a nearly 40% increase in average premiums as insurers
added the cost to benchmark silver plans in a move known as "silver loading."
Analysts have credited the slim premium increases insurers have announced so
far this year as a correction to excessive 2018 rate hikes.
But Verma
defended the expansion of short-term, limited duration plans as an affordable
option for people who can't afford Obamacare plans. Potentially, they could
appeal to the 20 million Americans who don't have coverage, she
added.
"The prediction was that the offering of short-term plans would
have negative impact on the market and increase premiums, but we're not seeing
the impact on the market," Verma said.
The administrator also announced
the administration will be writing new guidance for 1332 waivers to allow states
to broaden exchange plan design "to create more affordable options," but said
the new reinsurance programs are a key part of the overall drop in
premiums.
Federal exchange states that launch reinsurance programs in
2019 will see decreases in premiums as expected, but prices will not fall to
pre-2018 levels. Wisconsin, which had its 1332 waiver approved earlier this
year, will see a drop in averages from $464 in 2018 to $440 for 2019. In 2017,
average silver plan premiums in the state were just over $300. Maine's average
premiums will decline from $482 in 2018 to $446 in 2019, still more than $100
per month higher than the $316 in 2017.
New Jersey will see the sharpest
decrease with its reinsurance waiver. In 2017, average silver premiums were $286
per month, rising to $339 per month this year. With reinsurance, they will
settle in at $286 per month in 2019.
Last year, Alaska — which has the
highest insurance premiums in the country — saw a drastic decline after
implementation of its waiver. Average monthly premiums fell from $759 in 2017 to
$595 in 2018. Next year they will drop again to $576.
The CMS hasn't
made enrollment projections for 2019 based on these new numbers, but Verma added
that more people may opt for the federal exchanges "when we're not seeing
double-digit rate increases."
Verma said the administration still wants
changes to Obamacare's exchange rules.
"For millions of people, the law
needs to change," she told reporters. " While some have publicly been accusing
us of sabotage, we have been doing everything we can to mitigate problems of
Obamacare."