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Premiums for Most Popular Type of Obamacare Plan Will Drop Next Year

Premiums for Most Popular Type of Obamacare Plan Will Drop Next Year

WASHINGTON — Prices for the most popular type of health insurance under the Affordable Care Act will drop slightly next year in the federal marketplace, after several years of rapid increases, the Trump administration said on Thursday.

Specifically, it said, the average premium for the second-lowest-cost plans offering midlevel coverage will decline by 1.5 percent, to $406 a month — the first time this benchmark has declined since the federal insurance exchange made its debut in 2014.

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“Though the average decrease is small, it is a dramatic and very positive change from the double-digit increases experienced over the past two years,” said Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, which runs the online marketplace serving 39 states.

She said the numbers vindicated Trump administration policies that many health care experts say have destabilized insurance markets.

“While some have publicly been accusing us of sabotage, the reality is that we have been working hard to do everything we can to mitigate the damage caused by Obamacare,” Ms. Verma said, adding, “Our actions have succeeded.”

But those claims require some context.

Insurers initially lost hundreds of millions of dollars in the Affordable Care Act marketplace. President Trump and Republicans in Congress tried to repeal the law and then to undo it piece by piece. To make up for all the uncertainty, and for financial losses in their first years under the Affordable Care Act, insurers demanded big rate increases, to bring their revenue into line with their costs.

“Individual market insurers are currently 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. This profitability, she said, is probably attracting some insurers to the market and prompting others to return.

Ms. Verma said that “Anthem, Wellmark, Molina and Cigna are returning to the markets after leaving in 2016 and 2017.”

All told, Ms. Verma said, there will be 23 more insurers in the federal marketplace next year, and 29 current participants will expand into additional counties. The number of states with just a single insurer on the federal exchange will drop to four, from 10 this year, she said.

Open enrollment starts in three weeks, on Nov. 1, and continues to Dec. 15. But for consumers expecting to save money, there are some catches.

To get the benefit of the lower rates, consumers will, in many cases, need to switch to a different plan, with a different network of doctors. The benchmark premiums are used to calculate the subsidies available to consumers, so when benchmark premiums go down, subsidies may also go down.

The amount that rates will go down, or up, also varies substantially by state. Tennessee has by far the largest reduction in its benchmark premium, which will fall next year by $159 a month, or 26.2 percent, to $449 a month, federal officials said.

Other states with large percentage reductions in benchmark premiums, as reported by the Trump administration on Thursday, were New Hampshire, down 15.2 percent, to $330 a month; New Jersey, down 14.7 percent, to $289; New Mexico, down 14.3 percent, to $299; and Pennsylvania, down 15.9 percent, to $397.

States with the largest increases in benchmark premiums next year are Delaware, up 16.1 percent to $561 a month; Hawaii, up 12.5 percent, to $404; and North Dakota, up 20.2 percent, to $375.

About 8.7 million people signed up last fall for insurance using Healthcare.gov, the website for the federal marketplace.

Ms. 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.”

Mr. Trump has repeatedly described the Affordable Care Act as “a disaster” and predicted that it would implode. He cut off billions of dollars in cost-sharing payments to insurers in October last year. And he boasted at a political rally last week that he had “mostly obliterated Obamacare.”

But with opinion polls showing that the law has become more popular, his administration has altered its message, saying it knows how to make the law work better.

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