Feds say ACA’s silver plan premiums will drop in 2019


People using the federal healthcare.gov marketplace to buy health insurance in 2019 will see lower premiums for silver plans, the second-lowest cost option – the first such decline since the marketplace’s start in 2014 under the Affordable Care Act.

A conputer shows the healthcare.gov website on its screen Mary Ellen Schneider/MDedge News

The Centers for Medicare & Medicaid Services reported that premiums will drop 1.5% on average, after an average increase of 25.4% in 2017 and an increase of 36.9% in 2018.

Tennessee saw the greatest reduction for the 2019 plan year, dropping 26.2%. North Dakota was at the opposite end, seeing premiums increase by 20.2%. CMS provided a state-by-state breakdown of premium changes for states in the federally facilitated marketplace.

CMS Administrator Seema Verma credits the decline to market stabilization actions taken by the agency.

“Despite predictions that our actions would increase rates and destabilize the markets, the opposite has happened,” she said in a statement. “The drop in benchmark plan premiums for plan year 2019 and the increased choices for Americans seeking insurance on the exchanges is proof positive that our actions are working.”

While the agency is “encouraged by this progress, we aren’t satisfied,” Ms. Verma added. “Even with this reduction, average rates are still too high. If we are going to truly offer affordable, high-quality health care, ultimately, the law needs to change.”

Some experts, however, were quick to dismiss Ms. Verma’s assertions that federal government action caused the decline.

In fact, the trend is more of a market correction, said Sara Collins, PhD, vice president of health coverage and access at the Commonwealth Fund, New York. It follows 2 years of premium increases by insurers anticipating government actions to intentionally destabilize the market.

“We saw a correction in premiums in 2017, which reflected the phase-out of the reinsurance program, so insurers adjusted their premiums to reflect that,” Dr. Collins said. “Also, insurers are getting to know their risk pools better. So, the prediction was that the markets would stabilize in the out-years of implementation.”

The individual market “is weathering very well the attempts by the Trump administration and Congress over the past year to weaken it,” Dr. Collins added. Those include repealing the individual mandate penalties, ending federal cost-sharing reduction payments, and promoting the sale of short-term, limited-duration health policies.

Efforts at the state level also have been helpful in stabilizing the marketplace, she noted, particularly in those states that implemented reinsurance plans. CMS noted its role in approving reinsurance waivers in seven states as a reason for the overall decline.

Matthew Fiedler, PhD, a fellow at the Brookings Institution, Washington, concurred that the reduction was more of a market correction than anything else.

It “is not that the repeal of the individual mandate and various other policy changes implemented by the administration haven’t hurt rates,” he said. “It’s that rates were far higher than they needed to be in 2018. Even with the headwind of those policy games, rates are declining this year. Without those policy changes, rates would be declining by more in 2018.”

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