Health care ex­change pre­mi­ums dip, fi­nally

Lodi News-Sentinel - - BUSINESS - By Mary Ellen McIn­tire

Health in­sur­ance pre­mi­ums in the 39 states that use Health­Care.gov will fall 1.5 per­cent on av­er­age for the most com­monly pur­chased plans in 2019, mark­ing the first time that rates have dropped since the 2010 health care law was im­ple­mented.

The de­cline is a sig­nif­i­cant de­par­ture from steep in­creases in 2017 and 2018. Pre­mi­ums for Health­Care.gov plans grew by an av­er­age of 37 per­cent for plans this year, af­ter ris­ing by 25 per­cent the year be­fore, the Cen­ters for Medi­care and Med­i­caid Ser­vices said Thurs­day.

Last year, in­sur­ance com­pa­nies raised rates be­cause they were un­cer­tain about the fu­ture sta­bil­ity of the mar­kets cre­ated un­der the health care law. The ad­min­is­tra­tion had cut off fund­ing for sub­si­dies that helped some con­sumers af­ford outof-pocket costs and in­sur­ers an­tic­i­pated the ef­fec­tive end of a re­quire­ment for most Amer­i­cans to get cov­er­age, said Sab­rina Cor­lette, a re­search pro­fes­sor at the Cen­ter on Health In­sur­ance Re­forms at Ge­orge­town Univer­sity.

“What we’re see­ing now is that these com­pa­nies over­shot the mark a lit­tle bit with their pric­ing, and so they’re kind of re­cal­i­brat­ing now,” she said.

An­other rea­son why rates are dip­ping is that some states set up pro­grams to sub­si­dize high-cost en­rollees. Those so-called rein­sur­ance pro­grams lower pre­mi­ums by pro­vid­ing gov­ern­ment funds to in­sur­ers to help cover the sick­est en­rollees.

CMS Ad­min­is­tra­tor Seema Verma touted fed­eral ap­proval for rein­sur­ance pro­grams as ev­i­dence that the Trump ad­min­is­tra­tion was im­prov­ing rather than sab­o­tag­ing the mar­ket.

“De­spite pre­dic­tions that our ac­tions would in­crease rates and desta­bi­lize the mar­kets, the op­po­site has hap­pened. The drop in bench­mark plan pre­mi­ums for plan year 2019 and the in­creased choices for Amer­i­cans seek­ing in­sur­ance on the ex­changes is proof pos­i­tive that our ac­tions are work­ing,” Verma said in a state­ment. “While we are en­cour­aged by this progress, we aren’t sat­is­fied. Even with this re­duc­tion, av­er­age rates are still too high. If we are go­ing to truly of­fer af­ford­able, high qual­ity health­care, ul­ti­mately the law needs to change.”

Cyn­thia Cox, the Kaiser Fam­ily Foun­da­tion’s di­rec­tor of health re­form and pri­vate in­sur­ance, said that rein­sur­ance helped sta­bi­lize some mar­kets and said that fed­eral ac­tion last year to shorten the open en­roll­ment pe­riod one year ahead of sched­ule also gave in­sur­ers more cer­tainty, she said on Twit­ter.

Yet “things are al­ways com­pli­cated,” she added. Most con­sumers re­ceive sub­si­dies to help them pay their pre­mi­ums. Be­cause the sub­si­dies are tied to pre­mium costs, peo­ple who do get sub­si­dies may get less fi­nan­cial help and may want to look for cheaper plans to make the most of their sub­sidy.

State-by-state im­pact

The big­gest drop is a 26.2 per­cent de­crease in Ten­nessee. A 27-year-old non­smoker will pay $449 in av­er­age monthly pre­mi­ums next year for the sec­ond­low­est-cost sil­ver plan — the most com­monly bought plan — com­pared to $608 in 2018.

But the de­crease comes af­ter Ten­nessee rates sky­rock­eted. Be­tween 2017 and 2018, the av­er­age pre­mium in Ten­nessee grew by 56.3 per­cent, ac­cord­ing to CMS.

A hand­ful of other states, such as New Hamp­shire and Penn­syl­va­nia, will also see dou­ble-digit drops.

But some states will see an­other round of in­creases. Pre­mi­ums in North Dakota will rise 20.2 per­cent, while rates in Delaware are in­creas­ing 16.1 per­cent.

In­surer par­tic­i­pa­tion is also im­prov­ing next year. The share of coun­ties with only one in­surer is drop­ping from 56 per­cent to 39 per­cent, CMS said. Twen­tythree more in­sur­ance com­pa­nies are par­tic­i­pat­ing on Health­Care.gov in 2019 than in 2018, while 29 in­sur­ers are ex­pand­ing.

Cen­tene, the rare in­surer that has re­mained bullish on the in­di­vid­ual mar­ket­place through­out the tur­moil over the years, an­nounced Wed­nes­day that it is en­ter­ing Penn­syl­va­nia, North Carolina, South Carolina and Ten­nessee. The com­pany is also ex­pand­ing its foot­print in six other states.

Long-term views

Ways and Means Chair­man Kevin Brady said the lower pre­mi­ums are “en­cour­ag­ing,” but that the law is set up to fail over time.

“Our worry is that the Af­ford­able Care Act con­tin­ues to be un­sus­tain­able over time be­cause it was de­signed to be un­sus­tain­able over time, from the very be­gin­ning,” the Texas Re­pub­li­can said re­cently. “So we will con­tinue to work to pro­vide more af­ford­able health care to Amer­i­can fam­i­lies and small busi­nesses.”

Af­ter Repub­li­cans in Congress fell short in their ef­fort last year to over­haul the health care law, law­mak­ers and the ad­min­is­tra­tion took smaller steps to weaken the law and of­fer more types of plans that don’t meet all of the law’s re­quire­ments.

Congress ef­fec­tively ended the re­quire­ment that most Amer­i­cans have health in­sur­ance or pay a penalty as part of a tax over­haul. That takes ef­fect in Jan­uary.

Some ex­perts fear that other ac­tions the Trump ad­min­is­tra­tion took will hurt the mar­ket in the long run. The ad­min­is­tra­tion is ex­pand­ing ac­cess to al­ter­na­tive plans that don’t have to meet con­sumer pro­tec­tions of the health care law, for ex­am­ple. That could lead healthy con­sumers to drop out of the ex­changes and get skimpier cov­er­age through those al­ter­na­tives. If a sig­nif­i­cant num­ber of con­sumers exit the mar­ket­place, other con­sumers could see pre­mium in­creases in the fu­ture.

This year’s open en­roll­ment pe­riod runs from Nov. 1 through Dec. 15.

TRI­BUNE NEWS SER­VICE

Health in­sur­ance pre­mi­ums in 39 states will drop in 2019, some by dou­ble dig­its, ac­cord­ing to the Cen­ters for Medi­care and Med­i­caid Ser­vices.

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