Although premiums for Affordable Care Act Marketplace benchmark silver plans are decreasing on average across the U.S. in 2020, changes vary widely by geographic location and plan type, including premium increases in a number of counties and plans, according to a new Kaiser Family Foundation analysis of county-level data.
The analysis of premium data from insurer rate filings to state regulators, state exchange websites and healthcare.gov shows how premiums are changing next year at the county level, both before and after accounting for the federal subsidies that are available to some consumers depending on their income.
Unsubsidized premiums for benchmark silver plans -- which are the basis for determining federal financial help -- are dropping by 3.5%, on average, and by just under 3% for the lowest-cost bronze, silver and gold plans. But whether consumers will see their premium payments rise or fall will depend on their income, preferred metal level plan and how specific plan premiums are changing at the county level.
In Canadian County, Oklahoma, for instance, unsubsidized premiums for benchmark silver plans are dipping 28%, while unsubsidized premiums for low-cost bronze plans are increasing by 3% -- meaning premium tax credits will cover less of the total premium for a bronze plan next year, while bronze premium payments will go up for subsidized enrollees, after tax credits.
On the flip side of this coin is Allamakee County in Iowa, in which unsubsidized benchmark silver premiums are increasing by an average of 6%, while bronze plans are decreasing by 17%. In such areas, in which there's a growing gap between the benchmark plan and the bronze premium, premium tax credits will cover more of the total premium for a bronze plan and bronze premium payments, after tax credits, will go down for subsidized enrollees.
WHAT'S THE IMPACT
In 2020, the ACA's premium tax credits would cover the full premium of the lowest-cost bronze marketplace plan for a 40-year-old with an annual income of $20,000 in 2,661 of the nation's 3,142 counties -- 85% of all counties. The figure is 1,736 counties (55%) for a 40-year-old making $25,000; 608 counties (19%) for a person the same age who makes $30,000; 287 counties (9%) for someone making $35,000; and 135 counties (4%) for a 40-year-old making $40,000.
As in the previous two years, insurers generally loaded the cost from the termination of federal cost-sharing reduction payments entirely onto the silver tier of plans, a practice known as "silver loading." That means subsidy-eligible enrollees will continue to receive relatively large ACA premium tax credits, although the amount may be smaller than in past years based on decreases in the underlying benchmark silver premiums.
For subsidized enrollees, even a gold plan may be available at no cost after tax credits are applied. For instance, the tax credit for a 40-year-old with an annual income of $20,000 covers the full premium of the lowest-cost gold plan in 240 counties in the U.S., or 8% of counties.
THE LARGER TREND
In October, the Centers for Medicare and Medicaid Services said this is the second consecutive year of improving market conditions; the agency credited 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.