- Average monthly premiums for marketplace plans nationwide are expected to increase 0.6% for 2020 coverage — the lowest increase since the launch of the Affordable Care Act plans, according to an analysis of insurer rate filings submitted to all 50 states and D.C.
- It's important to note these filings are preliminary, and, in many cases, need approval from state insurance regulators who could also require even smaller increases.
- Many states would actually see a decrease in their average premiums, according to the analysis by Charles Gaba of ACASingups.net. In Colorado, the average premium would decrease by about 18%, the largest decline across all states.
The Trump administration is likely to claim victory for the decline in premiums in some states. It has been critical of the marketplaces and their high prices. CMS Administrator Seema Verma said Monday the marketplace is "failing the American people."
Yet health policy experts caution the modest premium growth is a result of a major overcorrection in 2018 that sent premiums soaring as insurers prepared for the uncertainty brought on by the threat of ACA repeal and the loss of cost-sharing subsidy payments.
"Plans had been so overpriced last year that insurers are now required under the ACA to issue record-large rebates to consumers. Plans were overpriced because insurers overcorrected and raised premiums too high going into 2018, amid the uncertainty of ACA repeal and the loss of cost-sharing subsidy payments," Cynthia Cox, vice president at the Kaiser Family Foundation, told Healthcare Dive.
Cox said the effect of overpricing is clearly illustrated in the chart below as profit margins spike. The chart is from a recent KFF analysis of insurer performance on the exchanges.
On Monday, CMS released new data that showed the marketplaces are continuing to lose those who do not qualify for financial help, or subsidies, to purchase affordable coverage.
Between 2016 and 2018, the online marketplaces reported a drop of 2.5 million unsubsidized shoppers.
"As President Trump predicted, people are fleeing the individual market. Obamacare is failing the American people, and the ongoing exodus of the unsubsidized population from the market proves that Obamacare's sky-high premiums are unaffordable," Seema Verma said in a tweet Monday in response to the data.
The gap between those on the exchanges with subsidized coverage and those without it continues to grow.