October 29, 2018

Premiums could have been 16% lower without Trump's policy changes, analysis finds

Daily Briefing

    Individual health plan premiums for the 2019 coverage year could have been up to 16% lower if the Trump administration had not made certain policy changes, such as expanding access to association and short-term health plans, according to a Kaiser Family Foundation (KFF) analysis released Friday.

    Cheat sheet: What you need to know about the ACA

    For the analysis, KFF researchers reviewed all publicly available premium rate filings that insurers selling 2019 health plans, both on and off the exchanges, submitted to states. Some of the filings also included insurers' justifications for seeking changes in their premium rates.

    Findings

    The researchers found that, in many of the filings, insurers cited the administration's expansions of association and short-term health plans, as well as Congress' elimination of the Affordable Care Act's individual mandate penalty, as reasons for requesting premium rate increases for 2019.

    According to the researchers, not all insurers provided public breakdowns of how the changes would affect premiums. However, among those that did, the researchers found the changes drove up premiums rates by as much as 16%, with an average rate increase of about 6%.

    Discussion

    The researchers noted that individual health plan premium rates are "moderating in 2019" because many insurers "oversho[t]" when they increased premiums rates for 2018. However, 2019 premiums rates could have been lower without the policy changes mentioned in insurers' filings, the researchers posited.

    The researchers noted that most individuals who enroll in exchange plans likely will not be affected by premium increases because subsidies they receive to help offset the costs of exchange plans will help offset the higher premiums. However, the researchers wrote that "off-exchange consumers on average will nonetheless pay an average of 6% more than they otherwise would have, if it were not for repeal of the individual mandate and expansion of more loosely regulated plans," because they do not qualify for subsidies (Baker, "Vitals," Axios, 10/26; KFF analysis, 10/26; King, Washington Examiner, 10/26;  Ehley, "Pulse," Politico, 10/26).

    Cheat sheet: What you need to know about the ACA

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    The Patient Protection and Affordable Care Act, otherwise known as the ACA, is the comprehensive health care reform bill passed by Congress in March, 2010. The law reshapes the way health care is delivered and financed by transitioning providers from a volume-based fee-for-service system toward value-based care.

    Download the ACA cheat sheet to get a quick overview of this significant U.S. health care legislation.

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