Health care exchange premiums dip, finally

Henrietta Strickland
October 14, 2018

"The drop in benchmark plan premiums for plan year 2019 and the increased choices for Americans seeking insurance on the exchanges is proof positive that our actions are working", Verma said in a statement.

He said premiums next year will "still be a whopping 30% higher than they were in 2017, with the vast bulk of that due specifically to sabotage actions taken by the Trump Administration and Congressional Republicans".

Insurers initially lost hundreds of millions of dollars in the Affordable Care Act marketplace. Reinsurance plans help insurers pay for the biggest claims or the sickest patients, helping them bring down rates for their other customers.

Cynthia Cox, who monitors the marketplaces for the Kaiser Family Foundation, wrote on Twitter: "One big reason insurers are lowering premiums: Individual market insurers are now so profitable it would be hard for many companies to justify a rate increase".

Beyond premiums, though, Verma noted also that fewer insurers are dropping out of the exchanges, and some are returning.

CMS estimates that there are 23 more QHP insurers in 2019 than in 2018, and that 29 QHP insurers are expanding coverage areas into more counties.

"So what we saw was enrollment stayed remarkably stable this year", she said.

CMS released the figures ahead of the open enrollment season that begins November 1 and will last until December 15 in most states, though places that command their own Obamacare website may give customers more time. Consumers expecting to save money must carefully compare options.

Those new plans are not yet available and are not included in the marketplace rates. 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.

The federal exchange covers about 9 million people in 39 states. For a 27-year-old nonsmoker, this means a monthly premium of $449, down from $608 this year.

A handful of other states, such as New Hampshire and Pennsylvania, will also see double-digit drops. Premiums in North Dakota will rise 20.2 percent, while rates in DE are increasing 16.1 percent. The highest cost is $709 in Wyoming.

Verma did not announce a numerical goal for the coming enrollment period. But she said the prospect of more moderate rate increases and, in some cases, rate reductions "might attract more people".

Popularly called as Obamacare, the most popular type of health insurance debuted in year 2014 and Trump had repeatedly described it as a disaster that is ready to implode. ACA profits have skyrocketed over the last several years, with insurers pulling in $155.70 in average gross margins per member each month in the second quarter of 2018. And he boasted at a political rally last week that he had "mostly obliterated Obamacare". After Trump took office, the Department of Justice looked into the funding source and determined that the Obama administration had not created permanent funding for it under the ACA, and without the approval of additional funding from Congress, the cost-sharing revenue payments had to stop.

After Republicans in Congress fell short in their effort a year ago to overhaul the health care law, lawmakers and the administration took smaller steps to weaken the law and offer more types of plans that don't meet all of the law's requirements. But some actions by the Trump administration have pleased insurers and made the marketplace more attractive to them. Most consumers receive subsidies to help them pay their premiums. These programs - in Alaska, Maine, Maryland, Minnesota, New Jersey, Oregon and Wisconsin - reduce the costs borne by insurers and enable them to reduce premiums below what they would otherwise charge.

Premiums generally rise with age and, in some states, can exceed $1,000 a month for people in their 50s and 60s. More than 80 percent of people who buy insurance on the exchange qualify for tax credits that reduce the cost.

Other reports by Click Lancashire

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