CMS on Tuesday announced that the average premium rate for the most commonly purchased silver-level health plans sold through the Affordable Care Act's (ACA's) federal exchange will be lower for the 2020 coverage year than they were for 2019.
CMS made the announcement ahead of the open enrollment period for the 2020 coverage year, which is scheduled to launch Nov. 1 and end Dec. 15. Coverage purchased during the open enrollment period will begin Jan. 1, 2020.
The announcement also comes as experts expect a federal appeals court in the coming days to issue a ruling in a lawsuit challenging the ACA's constitutionality. HHS Secretary Alex Azar said he does not expect the ruling will have an effect on the upcoming open enrollment period because the court's decision likely will be stayed and appealed to the Supreme Court. He said, "There will be more process to come. There will be no immediate disruption to anybody. We will run the program the day after such a ruling the way we did the day before such a ruling."
CMS data shows average silver-level premiums will decline
CMS on Tuesday released data on average monthly premium rates for silver-level health plans in the 39 states using the federal exchange for the ACA's upcoming open enrollment period. The data does not include information on the remaining 11 states and Washington, D.C., which use their own state-based exchanges.
Specifically, CMS found the average monthly premium rate for the second-lowest-cost silver-level health plans sold through the federal exchange for the 2020 coverage year will drop by 4%, marking the second consecutive year premiums have fallen. According to CMS, the average premiums for such a plan for:
- An average 27-year-old enrollee will decline from $406 during the 2019 coverage year to $388 during the 2020 coverage year; and
- An average family of four will decline from $1,591 during the 2019 coverage year to $1,520 during the 2020 coverage year.
Premium rate decreases will vary by state, CMS said. For example, CMS said average premium rates for the second-lowest-cost silver-level plans will decline by double-digit percentages in six states for 27 year-old enrollees, with such premiums falling by:
- 20% in Delaware;
- 15% in Nebraska;
- 15% in North Dakota;
- 14% in Montana;
- 14% in Oklahoma; and
- 10% in Utah.
CMS said the agency's approval of reinsurance programs in Delaware, Montana, and North Dakota contributed to the premium decreases.
Data shows deductibles will rise, subsidies will decrease
But the CMS data also shows the median deductible for mid-level silver plans sold through the federal exchange will increase by 3%, rising from $4,471 in 2019 to $4,604 for the 2020 coverage year.
Further, the data shows the average maximum subsidies for all eligible enrollees will decrease from $555 during the 2019 coverage year to $519 during the 2020 coverage year.
According to the data, nearly two-thirds of enrollees who will receive ACA subsidies during the 2020 coverage year, which represents about 87% of the market, will pay less than $75 per month in premiums if they keep the same level of coverage in which they are currently enrolled, and about one-third will pay less than $10 per month if the keep the same level of coverage in which they are currently enrolled. Among those who are ineligible for subsidies, more than one-third will pay over $500 per month in premiums, and about one-third will pay between $300 and $500 per month.
Data shows rise in insurer participation
CMS said its data also shows that the number of insurers participating in the federal exchange market will increase from 155 during the 2019 coverage year to 175 for the 2020 coverage year.
CMS said only two states using the federal exchange, Delaware and Wyoming, will have a single insurer selling health plans on the federal exchange—down from five states during the 2019 coverage year. CMS' data shows 12% of exchange enrollees will live in a county with only one insurer selling plans on the federal exchange during the 2020 coverage year—down from 20% during the 2019 coverage year. According to the data, individuals purchasing plans on the federal exchange on average will be able to choose from three to four insurers and 38 health plans. In comparison, enrollees had two to three insurers and 26 health plans from which to choose from during the 2019 coverage year.
CMS Administrator Seema Verma said, "CMS has taken strong steps to deliver more choice and affordability to consumers in the individual market and I'm pleased to report we're delivering strong results." She continued, "A second year of declining premiums and expanding choice is proof that our actions to promote more stability are working."
However, she added, "[P]remiums are still too high for people without subsidies."
HHS Secretary Alex Azar also noted that "premiums are still unaffordable," adding that the ACA is flawed and should be replaced. "This is not a workable way for Americans to finance the care they need … but we are headed in the right direction," he said.
Some experts pushed back on the notion that the Trump administration is responsible for the strong exchange market.
For instance, Leslie Dach—chair of Protect Our Care, which supports the ACA—said, "The administration deserves zero credit for the success of the ACA." Dach argued that many of the administration's policies have increased the number of uninsured U.S. residents (Goldstein, Washington Post, 10/22; Livingston, Modern Healthcare, 10/22; Goldberg, Politico, 10/22; Liss, Healthcare Dive, 10/22; Owens, "Vitals," Axios, 10/23; CMS release, 10/22).