October 31, 2017

HHS: Premiums, subsidies rise as insurer participation falls in ACA's federal exchange market

Daily Briefing

    Average premiums for benchmark silver-level plans sold on the federal exchange will rise for the 2018 coverage year as insurer participation in the exchange market declines, according to a report released Monday by HHS' Assistant Secretary for Planning and Evaluation.

    Report details

    For the report, HHS reviewed county-level data on issuers, health plans, and premiums from the Federally-Facilitated Exchange Qualified Health Plan landscape files for coverage years 2014 through 2018.

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    In addition, HHS reviewed individual enrollment data from CMS. Based on the data, HHS estimated the total and average number of issuers, health plans, and plan metal types across states that rely on the federal exchange for enrollment, as well as average premiums for the second-lowest cost silver plan sold through the federal exchange, which is used as a benchmark for HHS to determine federal subsidies available under the Affordable Care Act to help offset exchange enrollees' coverage costs.

    Findings

    Premium findings

    According to the report, the average premium for benchmark silver-level plans sold through the federal exchange will increase by 37 percent to $411 for the 2018 coverage year, compared with an average premium of $300 for the 2017 coverage year.

    The report found that the benchmark plan in Wyoming for the 2018 coverage year will have the highest average premium at $710, up 72 percent from $413 in 2017. According to the report, Indiana in the 2018 coverage year will have the lowest average premium for a benchmark plan at $286, up by 26 percent from $228 in 2017. In addition, the report found that Alaska will have the highest average premium decrease for the benchmark plan, with plans falling by 22 percent, from $760 in the 2017 coverage year to $596 in 2018.

    According to the report, a hypothetical 27-year-old who purchases a silver-level plan without receiving federal subsidies will pay an average premium of $4,932 for the 2018 coverage year. In comparison, a 27-year-old who did not receive federal subsidies in the 2017 coverage year paid an average premium of $3,600.

    As premiums rise, federal subsidies to help offset exchange enrollees' coverage costs will rise by 45 percent, from an average of $382 in the 2017 coverage year to an average of $555 in the 2018 coverage year, according to the report. For example, a 27-year old with an annual household income of $25,000 could receive $273 in advanced federal subsidies in 2018 to help offset the costs of an average benchmark plan premium, representing a 73 percent increase from 2017. As a result of the increased subsidies, the average monthly premium for a benchmark plan for a 27-year old with an annual household income of $25,000 will decline from $142 in the 2017 coverage year to $138 in the 2018 coverage year.

    Insurer participation findings

    The report found that 132 health insurers will sell federal exchange plans across the United States in the 2018 coverage year—down from 167 insurers in 2017. According to the report, 29 percent of current exchange enrollees will have only one insurer from which they can purchase exchange coverage from for the 2018 coverage year, up from 20 percent in 2017.

    Further, the report found that eight states that rely on the federal exchange will have only one insurer selling exchange coverage for the 2018 coverage year. According to the report, 55 percent of federal exchange enrollees will have just one or two exchange plan options for the 2018 coverage year, compared with 43 percent for the 2017 coverage year.

    Comments

    HHS press secretary Caitlin Oakley said, "This data demonstrates just how rapidly Obamacare's exchanges are deteriorating with skyrocketing premiums year after year, more than half of Americans with no more than two insurers to choose from, and the taxpayer burden exploding." She added, "There is an urgent and serious need to repeal this failed law and replace it with patient-centered solutions"  (Baker, Axios, 10/30; Leonard, Washington Examiner, 10/30; Jost, Health Affairs Blog, 10/30; Howell, Washington Times, 10/30; HHS report, 10/30).

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