Today,
the Centers for Medicare & Medicaid Services (CMS) announced that the
average premium for the second lowest cost silver plan on HealthCare.gov for a
27 year-old will drop by 4 percent for the 2020 coverage year. Additionally, 20
more issuers will participate in states that use the Federal Health Insurance
Exchange platform in 2020 bringing the total to 175 issuers compared to 132 in
2018, delivering more choice and competition for consumers. As a result of the
Trump Administration’s actions to stabilize the market, Americans will
experience lower premiums along with greater choice for the second consecutive
year.
“Lower
costs and more options for American patients are a key piece of President
Trump’s healthcare vision: an affordable, patient-centric system that puts you
in control, and treats you like a person, not a number,” said HHS Secretary
Alex Azar. “The President has delivered lower costs and more options under the
Affordable Care Act for two straight years, and this work reflects his overall
approach to healthcare: protect what works and fix what’s broken. The ACA
simply doesn’t work and it is still unaffordable for far too many. But until
Congress gets around to replacing it, President Trump will do what he can to
fix the problems created by this system for millions of Americans.”
The
implementation of Obamacare’s main regulations in 2014 severely upset the individual
market. Premiums in states using HealthCare.gov more than doubled by 2017,
compared to the year before Obamacare’s main regulations took effect. As
premiums rose, enrollment, especially among people who don’t receive premium
subsidies, declined. These trends began to surface between 2015 and 2016. By
2018, unsubsidized enrollment across the country had declined by 40 percent
from its peak in 2016. Under these conditions, a number of issuers left
the market.
From
2016 to 2017, the number of issuers in states using HealthCare.gov declined
from 237 to 167 and, in 2018, the number dropped to 132—a 44 percent drop in
only two years.
On his
first day in office, President Trump issued an executive order on minimizing
the economic burden of Obamacare and giving states more flexibility to address
problems with their healthcare markets. In response, CMS quickly issued the
market stabilization rule in 2017 and then issued further rules and guidance to
increase competition, expand choice, lower costs, and give states more control.
In addition, CMS has used its authority to issue waivers to approve reinsurance
programs in 12 states nationwide, all resulting in lower premiums.
“Under
President Trump’s leadership, 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,” said CMS Administrator Seema Verma.
“This Administration inherited double-digit premium increases and a steep drop
in plan choices as a result of Obamacare’s costly regulations. Despite the
law’s deep flaws, we have been committed to taking every step possible to lower
premiums and provide more choices. A second year of declining premiums and
expanding choice is proof that our actions to promote more stability are
working. But premiums are still too high for people without subsidies.”
The
report CMS issued today shows the second consecutive year of improving market
conditions under the Trump Administration’s new policies. The average premium for
the second lowest cost silver plan is decreasing by 4 percent on HealthCare.gov
from 2019 to 2020 for a 27 year-old. Six states experienced double-digit
percentage declines in average second lowest cost silver plan premiums for 27
year olds including, Delaware (20%), Nebraska (15%), North Dakota (15 %),
Montana (14%), Oklahoma (14%), and Utah (10%). CMS has used its authority to
approve reinsurance waivers in three of these states, including Delaware, North
Dakota and Montana, contributing to the decline in premiums.
While
today’s report shows the Administration’s efforts to stabilize the market are
working, Obamacare remains unaffordable for millions of Americans. Even with
these positive trends in the individual market, average premiums are still too
high and affordability remains a substantial challenge for people who do not
qualify for a tax credit and must pay the entire premium themselves. A recent
CMS report shows that 2.5 million people who didn’t receive federal premium tax
credits left the individual market from 2016 to 2018. This represents a 40
percent drop in just two years and demonstrates the ongoing challenges the
individual market still faces.
Understanding
challenges remain, the Trump Administration has taken action. The
Administration opened up more affordable coverage options, including the
expansion of short-term, limited-duration plans and association health plans,
neither of which have proven to “undermine” the ACA, as some critics have
claimed. While not for everyone, these plans can provide a lifeline to certain
people priced out of the individual market. Most recently, the Administration
also finalized a new policy to allow employers to fund individual market
premiums for their employees through health reimbursement arrangements. This
policy stands to strengthen the individual market while giving employees far
greater choice and control over their healthcare spending.
The
Health Insurance Exchange 2020 Open Enrollment Period is November 1, 2019 to
December 15, 2019, with coverage beginning on January 1st.
To view
the 2020 Health Insurance Exchange Premium Landscape Issue Brief, visit: https://www.cms.gov/CCIIO/Resources/Data-Resources/QHP-Choice-Premiums.html
To view
the 2020 Plan Landscape Data, visit: https://www.healthcare.gov/health-and-dental-plan-datasets-for-researchers-and-issuers/
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