- Win McNamee/Getty
- November 1 marked the opening day for Obamacare marketplace open enrollment.
- The average premium for the benchmark Obamacare plan will decline in 2019 compared to the year before.
- In fact, premiums are falling in 18 states, and another 13 are only seeing increases of 5% or less.
- While President Donald Trump has taken credit for the falling costs, health policy experts point to a different reason for the cost slowdown.
November 1 marked the first day Americans can sign up for health insurance on the Affordable Care Act’s marketplaces for 2019, marking the sixth open-enrollment period for the law known as Obamacare and the first to feature a fully stabilized program.
After years of increasing premiums, the marketplaces – for people who do not get coverage from their job or a government program like Medicare – appear to have finally settled into a groove. Many states will see small increases, and some will even experience decreases in premiums.
Why exactly we aren’t seeing the sky-high premium increases of previous years is a matter of some political debate, but many experts say that the improving costs are simply a function of time.
For the 39 states that use the federally facilitated Healthcare.gov platform, open enrollment runs from November 1 until December 15 (other states may have longer enrollment periods).
This is half the length of open enrollment periods under former President Barack Obama. But consumers in most states should be getting some relief from the skyrocketing premiums of recent years. The Kaiser Family Foundation, a nonpartisan health-policy think tank, crunched the numbers on premiums for every state and found a more favorable environment for consumers compared to previous years.
To determine a benchmark for premiums, Kaiser used the second-lowest cost silver-level plan for a 40-year-old male. (While the Department of Health and Human Services uses a 27-year-old male for its benchmark, the actual pool of enrollees is typically a bit older.)
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Overall, the United States saw an average premium decrease of 0.83% from 2018 to 2019 plans:
- 19 states posted premiums declines.
- 13 states saw increases of between 0% and 5%.
- For states that use the federal Healthcare.gov platform, the decline will be even better, with premiums dropping 1.5% on average.
- On the other end, there were only six states to post double-digit increases for benchmark premiums: Vermont, North Dakota, Delaware, Washington, Hawaii, and New York. Washington, DC, also posted a 16.13% jump.
The premium increases for 2019 are a far cry from just two years ago, when some states were facing jumps as high as 116% in Arizona. Trump, then a candidate, and the GOP used the premium jumps as an effective weapon against Hillary Clinton and many Democratic candidates.
During that election, Republicans promised to repeal and replace the ACA, a promise they failed to keep. The Trump administration and the GOP have made major changes to the healthcare system, but whether those are the reason for the easing of increases is up for debate.
Why are premiums going down?
Seema Verma, the administrator for the Centers for Medicare and Medicaid Services, took credit for the drop.
“President Trump’s Administration took action to address the skyrocketing price of health insurance, and now we are starting to see the results,” Verma said.
The administration took a series of actions to shake up the ACA marketplaces, including the expansion of short-term, limited-duration health plans. In addition, the GOP repealed the individual mandate – the requirement every American have insurance or face a financial penalty – as part of the tax reform law.
While Republicans pointed to those actions as examples of policies that reduced premiums, health-policy analysts have argued they have weakened protections for people with preexisting conditions and could eventually drive up costs for sicker people who remain in the Obamacare markets.
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But even in terms of 2019’s cost, recent studies showed that premiums are coming down in spite of Trump’s changes – not because of them:
- Researchers at the Kaiser Family Foundation went through insurer filings and various data to model just how much the Trump administration’s actions influenced premiums and found that the meddling actually made premiums higher than they would have been otherwise.
- The main reason for 2019’s premium drop is that profit margins on many insurers’ Obamacare products grew after the large price jumps in previous years.
- Those companies could now correct back in the other direction by lowering premiums.
- But the Trump administration’s actions forced the insurers to keep the premiums 16% higher than they would be otherwise, Kaiser said.
“Instead of 2019 benchmark silver premiums on healthcare.gov averaging $495 per month for a 40-year-old, as was recently reported by HHS, we estimate the premium would be approximately $427 in the absence of individual mandate penalty repeal, expansion of more loosely regulated plans, and the loss of cost-sharing subsidy payments,” the report said.
“Indeed, under my base assumptions, I estimate that the nationwide average per member per month premium in the individual market would fall by 4.3% in 2019 in a stable policy environment,” Fiedler wrote.
Prices are still much higher than just a few years ago
Breaking down the last five years of premium jumps, the large shifts in cost across the US are obvious:
- Shayanne Gal/Business Insider
Since 2014, three states have seen premiums for benchmark plans increase by more than 200% – Nebraska, Oklahoma, and Iowa – while 20 states have seen an increase of at least 100%.