The Centers for Medicare & Medicaid Services (CMS) announced today that the average premium for second lowest cost silver plans (SLCSP) for the 2019 coverage year will drop by 1.5 percent, the first time average premiums have dropped since the implementation of the Affordable Care Act (ACA) in 2014. Tennessee’s decrease is the largest with a 26.2 percent reduction. These premium reductions along with increased issuer participation strongly suggest that the numerous actions taken by the Trump administration to stabilize the market are working.
“President Trump’s Administration took action to address the skyrocketing price of health insurance, and now we are starting to see the results,” said CMS Administrator Seema Verma.
“Despite predictions that our actions would increase rates and destabilize the markets, the opposite has happened. 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 we are encouraged by this progress, we aren’t satisfied. Even with this reduction, average rates are still too high. If we are going to truly offer affordable, high quality healthcare, ultimately the law needs to change.”
After ACA regulations took effect in 2014, average individual market premiums more than doubled from $2,784 per year in 2013 to $5,712 on HealthCare.gov in 2017, an increase of $2,928 or 105 percent. In the HealthCare.gov states, between 2017 and 2018, the average premium for the second-lowest cost silver plan increased by 37 percent. Between 2016 and 2017, the hike in average premiums was 25 percent.
In addition, since 2016 many individual market issuers have opted out of the ACA exchange in states using the platform. For example, for the 2016 plan year, there were 237 medical qualified health plan (QHP) issuers operating within exchanges on the federal platform, but by the next year there were only 167 medical QHP issuers, which is approximately a 30 percent decrease. By 2018, more than half of U.S. counties on the federal platform had only one issuer, leaving millions of consumers with little to no choice.
Each year, CMS certifies plans available for sale on the HealthCare.gov platform. As defined in the ACA, a qualified health plan (QHP) is an insurance plan that is certified by CMS to meet statutory requirements, including benefits, established limits on cost sharing, and other requirements outlined within the application process. CMS gathers rate and premium information from issuers seeking certification to participate on Healthcare.gov.
To determine the year-over-year changes, CMS analyzed exchange individual plan year 2019 premium data submitted as of Sept. 28, 2018, as part of the QHP certification process.