Oct 22, 2019
Premiums for HealthCare.gov Plans are down 4 percent but remain unaffordable to non-subsidized consumers
Administration’s actions bring increased issuer participation, competition and greater choice to the Federal Health Insurance Exchanges
Today, the Centers for Medicare & Medicaid Services (CMS) announced that the average premium for the second lowest cost silver plan on HealthCare.gov for a 27 year-old will drop by 4 percent for the 2020 coverage year. Additionally, 20 more issuers will participate in states that use the Federal Health Insurance Exchange platform in 2020 bringing the total to 175 issuers compared to 132 in 2018, delivering more choice and competition for consumers. As a result of the Trump Administration’s actions to stabilize the market, Americans will experience lower premiums along with greater choice for the second consecutive year.
“Lower costs and more options for American patients are a key piece of President Trump’s healthcare vision: an affordable, patient-centric system that puts you in control, and treats you like a person, not a number,” said HHS Secretary Alex Azar. “The President has delivered lower costs and more options under the Affordable Care Act for two straight years, and this work reflects his overall approach to healthcare: protect what works and fix what’s broken. The ACA simply doesn’t work and it is still unaffordable for far too many. But until Congress gets around to replacing it, President Trump will do what he can to fix the problems created by this system for millions of Americans.”
The implementation of Obamacare’s main regulations in 2014 severely upset the individual market. Premiums in states using HealthCare.gov more than doubled by 2017, compared to the year before Obamacare’s main regulations took effect. As premiums rose, enrollment, especially among people who don’t receive premium subsidies, declined. These trends began to surface between 2015 and 2016. By 2018, unsubsidized enrollment across the country had declined by 40 percent from its peak in 2016. Under these conditions, a number of issuers left the market. From 2016 to 2017, the number of issuers in states using HealthCare.gov declined from 237 to 167 and, in 2018, the number dropped to 132—a 44 percent drop in only two years.
On his first day in office, President Trump issued an executive order on minimizing the economic burden of Obamacare and giving states more flexibility to address problems with their healthcare markets. In response, CMS quickly issued the market stabilization rule in 2017 and then issued further rules and guidance to increase competition, expand choice, lower costs, and give states more control. In addition, CMS has used its authority to issue waivers to approve reinsurance programs in 12 states nationwide, all resulting in lower premiums.
“Under President Trump’s leadership, CMS has taken strong steps to deliver more choice and affordability to consumers in the individual market and I’m pleased to report we’re delivering strong results,” said CMS Administrator Seema Verma. “This Administration inherited double-digit premium increases and a steep drop in plan choices as a result of Obamacare’s costly regulations. Despite the law’s deep flaws, we have been committed to taking every step possible to lower premiums and provide more choices. A second year of declining premiums and expanding choice is proof that our actions to promote more stability are working. But premiums are still too high for people without subsidies.”
The report CMS issued today shows the second consecutive year of improving market conditions under the Trump Administration’s new policies. The average premium for the second lowest cost silver plan is decreasing by 4 percent on HealthCare.gov from 2019 to 2020 for a 27 year-old. Six states experienced double-digit percentage declines in average second lowest cost silver plan premiums for 27 year olds including, Delaware (20%), Nebraska (15%), North Dakota (15 %), Montana (14%), Oklahoma (14%), and Utah (10%). CMS has used its authority to approve reinsurance waivers in three of these states, including Delaware, North Dakota and Montana, contributing to the decline in premiums.
While today’s report shows the Administration’s efforts to stabilize the market are working, Obamacare remains unaffordable for millions of Americans. Even with these positive trends in the individual market, average premiums are still too high and affordability remains a substantial challenge for people who do not qualify for a tax credit and must pay the entire premium themselves. A recent CMS report shows that 2.5 million people who didn’t receive federal premium tax credits left the individual market from 2016 to 2018. This represents a 40 percent drop in just two years and demonstrates the ongoing challenges the individual market still faces.
Understanding challenges remain, the Trump Administration has taken action. The Administration opened up more affordable coverage options, including the expansion of short-term, limited-duration plans and association health plans, neither of which have proven to “undermine” the ACA, as some critics have claimed. While not for everyone, these plans can provide a lifeline to certain people priced out of the individual market. Most recently, the Administration also finalized a new policy to allow employers to fund individual market premiums for their employees through health reimbursement arrangements. This policy stands to strengthen the individual market while giving employees far greater choice and control over their healthcare spending.
The Health Insurance Exchange 2020 Open Enrollment Period is November 1, 2019 to December 15, 2019, with coverage beginning on January 1st.
To view the 2020 Health Insurance Exchange Premium Landscape Issue Brief, visit: https://www.cms.gov/CCIIO/Resources/Data-Resources/QHP-Choice-Premiums.html
To view the 2020 Plan Landscape Data, visit: https://www.healthcare.gov/health-and-dental-plan-datasets-for-researchers-and-issuers/
To see the 2020 Health Insurance Exchange Public Use Files, visit: https://www.cms.gov/cciio/resources/data-resources/marketplace-puf.html