The 2018 open enrollment period launches next week, and several new analyses released this week show that premium rates in most states that rely on the federal exchange website will increase by double-digit margins—but a growing number of consumers will still have access to zero-premium health plans.
HHS on Wednesday published premium rates for the 2018 coverage year on HealthCare.gov. An HHS official this week said in a break with previous years, the Trump administration will not project how many U.S. residents will enroll in coverage during the open enrollment period, which will run from Nov. 1 to Dec. 15—about half the length of previous enrollment periods.
Double-digit premium hikes
An Avalere analysis, which is based on the newly available individual health plan data for plans sold in the 39 states that rely on the federal exchange, found premiums for silver-level plans sold on the federal exchange will be 34 percent higher, on average, in 2018, compared with 2017.
The analysis also found the average premium prices for so-called "benchmark plans"—which are the second-lowest-priced silver plans in a market used to determine federal subsidies—will rise by 38 percent. According to CNBC, that is 13 percentage points higher than the premium increase for benchmark plans in 2017.
Average premiums in 2018 for bronze, gold, and platinum plans will rise 18 percent, 16 percent, and 24 percent, respectively, according to the analysis.
The analysis found the premium rate changes will vary by state, ranging from an average 67 percent increase in Iowa to an average 22 percent decrease in Alaska. According to the analysis, two other states—Arizona and North Dakota—will see average premium prices decline compared with 2017. Of the states that will see increases, all but one—Oklahoma—will see double-digit increases for silver-level plans, according to the analysis.
Zero-premium health plan options increase
Meanwhile, a separate analysis of the federal data from Oliver Wyman found that individuals who qualify for federal subsidies will be largely unaffected by the premium rate changes and that in many counties such individuals will have access to zero-premium health plans.
Under the ACA, individuals with annual incomes between 100 percent and 250 percent of the federal poverty level qualify for federal subsidies to help offset the cost of coverage. Those subsidies will increase along with the benchmark plan premiums.
As a result, Oliver Wyman found that in 2,692 of the 2,722 counties that rely on the federal exchange, at least some consumers will have access to zero-premium health plans—though availability will vary based on age and income, with older and lower-income consumers having the most zero-premium plan options.
For example, the analysis showed a hypothetical 60-year-old man with an annual income of about $36,000 would be able to find a zero-premium health plan for 2018 in 1,590 counties, while a hypothetical man of the same age with an annual income of $48,000 would be able to find such a plan in 654 counties.
According to the Wall Street Journal, access to zero-premium health plans have increased since 2017 when a hypothetical 60-year old man with an annual income of about $36,000 had options in about 300 counties.
Reasons for the premium rate increases
According to the Detroit Free Press, insurers have cited several reasons for the 2018 premium increases, including:
- Enrollees who stop paying premiums after receiving care;
- Rising health care costs, particularly for specialty drugs; and
- Too few young adults purchasing individual health plans.
However, according to policy experts, much of the premium increases for 2018 plans was driven by the Trump administration's decision to stop paying insurers the cost-sharing reductions (CSR) called for under the Affordable Care Act.
According to a new Kaiser Family Foundation analysis, the CSR payment cut raised premiums for silver-level health plans by about 7 to 38 percentage points for 2018.A new Brookings Institution analysis further verified those claims, finding that after struggling from 2014 to 2016 to set accurate premium rates, insurers in 2017 levied large premium rate increases that largely stabilized their businesses. The analysis stated, "In a stable policy environment, 2018 premium increases … would have been in the mid-to-high single digits, on average," but the uncertainty over Republican efforts to repeal and replace the Affordable Care Act, as well as President Trump's decision to halt CSR payments, resulted in significantly higher premium increases for 2018 (Wilde Mathews, Wall Street Journal, 10/25; Reindl, Detroit Free Press/USA Today, 10/25; Baker, "Vitals," Axios, 10/26; Howell, Washington Times, 10/25; Mangan, CNBC, 10/25; Weixel, The Hill, 10/25; Alonso-Zaldivar, AP/Seattle Times, 10/25; Avalere release, 10/25; Wilde Mathews/Weaver, Wall Street Journal, 10/27; Baker, "Vitals," Axios, 10/27).
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