Obamacare Premiums to Drop for the First Time

Obamacare Premiums to Drop for the First Time

The decline is the first for this benchmark since the federal exchanges were launched in 2014.

Average premiums for insurance sold on the federal Obamacare health insurance markets are going down next year, the Trump administration announced Thursday, as it took credit for the 1.5 percent drop.

However, the data is specifically weighted using the most recent 2018 data and is calculated for beneficiaries that are 27-year-old non-smokers. Those silver plans are used by the ACA to set subsidies.

But some states will see another round of increases. "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". Twenty-nine insurers have expanded their reach, bringing the percentage of counties with just one insurer down from 56% past year to 39% in 2019.

The average decrease comes despite accusations from critics that the Trump administration has sabotaged the exchanges by repealing the individual mandate, cutting of cost-sharing reduction payments and slashing funding the Affordable Care Act's Navigator program. "We can see the rates oftentimes did go down [as a result]", she said, Verma also noted that there were 23 more health insurance issuers in 2019 than in 2018, and 29 issuers are expanding into new counties. Many are breaking even or have started making a profit in the individual market, despite changes to the Obamacare system since President Donald Trump took office.

However, independent experts say insurers have already raised rates to compensate for actions taken by the Trump administration.

State CMS data show, for instance, Alabama's rates increased by 58% in 2017 and almost 20% for 2018, but are now expected to drop by 2.2%.

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Eight states will experience premium decreases of 10 to 20 percent for the lowest cost silver-tier plan, according to CMS estimates. Instead, premiums rose in a few states by as much as 190% or more from 2013 to 2017, she said. Congress and the president ended certain subsidies for low-income Americans.

Verma attribued the 1.5% overall drop to looser regulations, the Trump administration's market stabilization rule and the seven 1332 State Innovation Waiver approvals that launched reinsurance programs.

That decision was made last October, which created uncertainty for insurers, most of which were required to submit their rates for review in September.

Tennessee will see the sharpest premium decline, as average monthly premiums for silver plans fell more than 26%, from more than $600 a year ago to $449.

Reinsurance programs that protect insurers from high-cost enrollees have also helped to keep premiums lower.

On the call with reporters, Verma also touted the administration's expansion of short-term, limited duration health insurance plans from under three months to up to three years. The administration expanded them, she explained, because they provided coverage for people whose premiums were so expensive, they might not have been able to afford insurance otherwise. Because the subsidies are tied to premium costs, people who do get subsidies may get less financial help and may want to look for cheaper plans to make the most of their subsidy. "The prediction was that offering short-term plans would have a negative impact on the market". The pattern of more moderate rate increases could hold in future years if the markets remain stable, but it's uncertain how the spread of plans that don't comply with the ACA, and the legal challenges to the health law itself, will affect insurer pricing in years to come.

While Republican-led repeal efforts failed previous year, Trump has in the run-up to the November midterms continued touting alternatives to Obamacare as well as slamming Democratic proposals to expand Medicare. At least two Republicans would have had to vote for it to be passed.

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