Premiums for key health plans will drop by an average of 1.5 percent on the federal marketplace in 2019, the Trump administration said Thursday, heralding an “especially gratifying” end to years of eye-popping hikes on HealthCare.gov.
Some places will see double-digit decreases in the cost of “benchmark” plans on the exchange serving 39 states. Tennessee’s rates will dive 26 percent and Pennsylvania will see a 16 percent drop, for instance, while states that do see increases will face “modest” pain, according to the Centers for Medicare and Medicaid Services, which took a victory lap.
“Despite predictions that our actions would increase rates and destabilize the markets, the opposite has happened,” CMS Administrator Seema Verma said.
Health Secretary Alex Azar had teased the news in public remarks weeks ago, though CMS made it official on Thursday, with additional data on the states.
Rates across all tiers are expected to rise by a modest average of 3 percent, according to an outside analysis, and CMS’ data did not include nearly a dozen states operating their own websites.
For now, it’s unclear whether the shift in Obamacare’s fortunes will have a huge impact on enrollment, though Ms. Verma said the benchmark decrease “might attract more people to the exchanges.”
CMS released the figures ahead of the open enrollment season that begins Nov. 1 and will last until Dec. 15 in most states, though places that command their own Obamacare website may give customers more time.
Insurers are demanding less because they’ve finally adjusted to the market ushered in by the Affordable Care Act and cannot justify the type of sharp increases they sought this past round, when they cited a poor mix of customers and uncertainty around Obamacare’s future under President Trump, according to policy analysts.
Experts say the rates might have been lower had Mr. Trump not marshaled the GOP to gut Obamacare’s “individual mandate” to hold insurance or opened the door to bare-bones plans that may siphon healthier people off the exchanges.
Yet the administration claimed credit for the promising trend Thursday, saying Mr. Trump’s tweaks paid off to despite claims of “sabotage” by Democrats, who’d predicted soaring rates in the run-up to the mid-term elections.
“The rhetoric out there on the exchanges has not often matched the facts,” Ms. Verma said.
The administrator responded to questions about the disparity between her view and that of analysts by repeating the fact that sky-is-falling predictions from critics never materialized.
“Collectively, all the moves we made … have all come together to lower premiums,” Ms. Verma said.
Analysts say the administration can take some credit for cutting the enrollment period in half and tightening up eligibility requirements for special enrollment periods — things insurers requested. And it can take full credit for letting seven states set up reinsurance programs, which subsidize the costs of extra-pricey customers so others can pay less.
Ms. Verma said the approvals appeared to have a “direct impact” on rate requests.
“You can see the rates in those states often did go down,” Ms. Verma said.
More than eight in 10 customers on Obamacare’s web-based exchanges received federal subsidies, so they are largely insulated from year-to-year premium changes.
But the announcement is a promising sign for taxpayers who foot the bill for those subsidies, which rise with premiums and are calculated based on the benchmark plan, which his the second-lowest cost silver plan on each state’s exchange.
Also, people who buy insurance on their own but earn too much to qualify for assistance are especially price-conscious and will pay close attention to any changes in premiums.
The unsubsidized population is reeling from premium increases during Obamacare’s early rounds.
Congressional Republicans and opponents of the law say a correction this year is not enough to erase the pain that’s compounded over time, so the law still needs to be repealed and replaced.
“This is by no means a celebration,” Ms. Verma said. “The law needs to change.”