- Average premiums for benchmark Affordable Care Act plans dropped 2% for the 2021 plan year, according to CMS. It's the third year that premiums for Healthcare.gov plans have decreased, following years of volatility in the market.
- Additionally, for states that used the federal exchange website Healthcare.gov in 2020 and 2021, 22 more issuers will offer coverage in 2021, bringing the total number of insurers in the exchanges to 181, CMS said Monday.
- The price easing comes despite the Trump administration's efforts at chipping away at the law, from cutting money for outreach to backing a lawsuit to overturn it now pending at the Supreme Court.
The ACA market has proven extremely resilient. Following initial years of insurer uncertainty and skyrocketing prices, premiums in benchmark plans offered on Healthcare.gov have now dropped 8% since the 2018 coverage year, CMS said. The second-cheapest silver plans in the marketplace are called "benchmark plans" because the government uses them as a benchmark to calculate tax credits to lower the cost of coverage.
Thirty-eight states use the online federal exchange Healthcare.gov to sell ACA plans to their citizens. In 2021, four states will see double-digit drops in average benchmark plan premiums for 27-year-olds: Iowa, Maine, New Hampshire and Wyoming, CMS said.
And insurer participation is also ramping up — for the third year in a row, according to the administration. The percentage of Healthcare.gov enrollees with access to just one insurer dropped to just 4% in 2021, down from 29% in 2018. And the portion of counties with only a single insurer dropped from about 50% in 2018 to 24% in 2020 and 9% in 2021.
More than three-quarters of enrollees will have access to at least three issuers in 2021, CMS said.
The Trump administration has enacted a flurry of policies experts say have damaged the exchanges, including ending cost-sharing reduction subsidies to insurers, reducing the open enrollment period, slashing funding for outreach and enrollment programs and increasing access to short-term health plans, skimpy coverage that doesn't have to comply with the ACA's health protections.
Starting around 2016 and 2017, many payers instituted premium increases as a result, and some major insurers left the exchanges amid a sicker-than-expected risk pool, growing financial losses and political uncertainty. But the market began to stabilize around 2020, according to the Robert Wood Johnson Foundation.
And COVID-19 economic pressures have caused an untold number of Americans to lose their employer-sponsored coverage, leaving them few options for health insurance — the ACA exchanges being one of them. That could be a tailwind for players like Centene, with a heavy presence in the marketplace. And some major carriers, including UnitedHealthcare and Cigna, are ratcheting up their presence in the exchanges as a result.
But the marketplace still faces a slew of challenges. Chief among them: The Republican-led Senate plans to confirm conservative Judge Amy Coney Barrett to the Supreme Court before the court hears arguments in November on the contentious ACA case, where a handful of Republican states and the Trump administration are arguing the entire law is unconstitutional without the individual mandate. An estimated 20 million Americans would lose coverage if the ACA is struck down.
Average premiums are still significantly higher than when the ACA was first implemented, and affordability in the exchanges is still a problem for consumers who don't qualify for subsidized coverage.
The average benchmark plan premium for a family of four has increased from $794 in 2014 to $1,486 in 2021, according to CMS.
Insurers have struggled to price plans for 2021 as the pandemic drives historic profits and low medical loss ratios due to deferred care. The majority of rate changes for the coming plan year have been moderate, according to a Kaiser Family Foundation analysis of premium rate filings, with changes of just a few percentage points. Only about 43% of insurers are factoring in the effects of COVID-19 on their rates for 2021.
The enrollment period on Healthcare.gov for 2021 plans is Nov. 1 through Dec. 15.