More insurers are participating in Affordable Care Act plans and premiums are lower going into open enrollment for 2020.
For a 27-year-old, the average premium for the second lowest cost silver plan on HealthCare.gov will drop by 4% and 20 more issuers will participate in states that use the federal health insurance exchange in 2020, according to the Centers for Medicare and Medicaid Services.
In total, 27 out of the 38 states on the federal exchange are seeing decreases in the benchmark premium.
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The number of insurers in the market is 175 compared to 132 in 2018. This is an increase of 20 issuers from 2019. Only two states have a single issuer this coming year, compared with five states last year.
The average enrollee will have 3.5 issuers available in 2020, compared with 2.8 issuers in 2019.
WHY THIS MATTERS
This is the second consecutive year of improving market conditions, CMS said, crediting the improvement to the Trump Administration's new flexibilities around the law, such as state-based reinsurance programs through Section 1332 waivers.
Beginning in 2017, states could apply for a Section 1332 waiver to modify key parts of the ACA to offer a new coverage system within certain guardrails at lower premiums. At least 12 states have approved reinsurance programs resulting in lower premiums, CMS said.
Of the six states experiencing double-digit percentage declines in average second-lowest cost silver plan premiums for 27-year-olds, three received authority from CMS for reinsurance waivers. These states are Delaware, North Dakota and Montana, which have declining premiums of 20, 15 and 14%, respectively.
The three other states are Nebraska (15%), Oklahoma (14%), and Utah (10%).
In 2018, the Trump Administration allowed waiver authority for broader changes, including the sale of non ACA-compliant plans such as short-term, limited-duration plans and association health plans.
Neither has proven to undermine the ACA, as some critics have claimed, CMS said.
Most recently, the Administration also finalized a new policy to allow employers to fund individual market premiums for their employees through health reimbursement arrangements.
In fact, Health and Human Services Secretary Alex Azar said, President Trump has done more to strengthen the ACA than his predecessor, Barack Obama, who as president signed the bill into law.
"I said last year that President Trump, the President who was supposedly trying to sabotage this law, has been better at running it than the guy who wrote the law -- and that has remained the case this year," Azar said.
Azar said premiums are still unaffordable for many. For instance, a 27-year-old single person buying the second-lowest cost silver plan in Nebraska is going to pay $583 a month for coverage, down from $687 in 2019. That's real savings, he said, but it's still almost $7,000 a year for insurance premiums.
The Health Insurance Exchange 2020 Open Enrollment Period is November 1, 2019 to December 15, 2019, with coverage beginning on January 1.
THE LARGER TREND
The implementation of Obamacare's main regulations in 2014 severely upset the individual market, CMS said.
Premiums in states using HealthCare.gov more than doubled by 2017. As premiums rose, enrollment declined, especially among those who didn't receive premium subsidies.
By 2018, unsubsidized enrollment across the country had declined by 40 percent from its peak in 2016. Under these conditions, a number of insurers left the market. There was a 44% drop over two years, from 237 insurers in 2016, to 167 in 2017, to 132 in 2018.
The individual market is still challenged to meet the health insurance needs of individuals who do not qualify for the federal premium tax credit, CMS said. A recent CMS report shows that 2.5 million people who didn't receive federal premium tax credits left the individual market from 2016 to 2018, a 40% drop.
For 2020, Medicare Advantage premiums are down, Part D premiums are down, and now ACA premiums are down, Azar said.
ON THE RECORD
"This administration has made no secret about it: We believe the Affordable Care Act simply doesn't work. It is still unaffordable for far too many. But until Congress gets around to replacing it, the President will do what he can to fix the problems created by this system for millions of Americans, including the 29 million Americans who remain uninsured," Azar said.
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