The good news: 2019 premiums in the Affordable Care Act (ACA) marketplace are flat or falling in many parts of the country. The bad news: A Kaiser Family Foundation (KFF) analysis finds that the premiums would be substantially lower still if the Trump administration didn’t make a series of changes to private insurance markets.
A recent KFF report found that ACA silver-level plans sold in the marketplace will cost an average of 16 percent more than they otherwise would have due to the combined effects of the loss of ACA cost-sharing reduction payments, the repeal of the ACA’s individual mandate penalty, and the expansion in the availability of more loosely-regulated plans.
The impact of the administration’s changes in actual dollars means that 2019 benchmark silver plan premiums for a 40-year old on healthcare.gov would have averaged $427 per month in 2019, instead of the $495 per month recently reported by the Department of Health and Human Services.
The study also finds that premiums for all ACA-compliant plans (those sold on and off the exchange) will on average be 6 percent higher than they otherwise would have been if the administration hadn’t backed the repeal of the individual mandate penalty and the expansion in the availability of short-term and association health plans. KFF based its findings on what insurers explicitly reported in their 2019 rate filings. However, researchers said it is a conservative estimate because some insurers also increased premiums in 2018 based on an expectation that the individual mandate might be repealed or weakly enforced.
“Repealing the mandate penalty and expanding the availability of short-term plans and association health plans effectively siphons healthy people from the ACA marketplaces, driving up premiums as insurers’ risk pools include a larger share of sick people relative to healthier ones,” KFF said in an announcement.
The stripping of federal payments that insurers used under the ACA to lower the cost-sharing burden of some customers caused insurers to raise premiums to recover costs that they subsequently had to bear themselves, in many cases increasing premiums only for silver plans, according to KFF.
Consumers eligible for federal premium tax credits in the ACA marketplaces are shielded from the effect of higher premiums. But for unsubsidized consumers and those who buy ACA-compliant policies off-exchange, recent premium hikes have made health insurance increasingly less affordable in recent years, effectively pricing some of them out of the market.
Kevin Mowll, executive director of RISE, said that given the overblown rhetoric surrounding the public policies around preexisting conditions and marketplace stabilization, it’s important the industry examine the actual effects of the actions the Trump administration has taken.
“Cutting through the swirl of words the Kaiser research points directly to the bottom line,” Mowll said.