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ACA Silver Plans Face Double-Digit Premium Hikes

Analysis  |  By John Commins  
   June 21, 2018

Rate filings suggest more plan choices in 2019, but if proposed exchange premiums are approved, a typical silver exchange plan will cost $98 more per month.

Proposed 2019 exchange premiums for silver health insurance plans are 15% higher, on average, than 2018 final premiums, new research from Avalere shows.

If approved, average silver-level exchange plan premiums will be $98 more per month in the states analyzed, up from $642 in 2018 to $740 in 2019.

These findings are based on an Avalere analysis of the complete 2019 individual market proposed rate filings released publicly by 10 states and Washington, DC.

"Insurers are starting to gain a better understanding of who is likely to buy their health insurance through the exchanges, but questions about the stability of the market remain," Avalere President Matt Brow said in a media release.

"This uncertainty is likely to contribute to substantial increases in exchange premiums across many states in 2019," he said.

Avalere blamed the premium hikes on:

  • The discontinuation of federal reimbursements for cost-sharing reduction plans and state strategies to allow insurers offering plans in the exchanges to recoup the lost reimbursements;
     
  • The repeal of the individual mandate beginning in 2019;
     
  • The lack of federal legislation to stabilize the individual market amidst enrollee risk and structural uncertainties.

Average premium rates increased in all states analyzed by Avalere, except Minnesota, where state officials attributed the premium decline to the state's reinsurance program.

CBO Projections

The Avalere projections are in line with those in a Congressional Budget Office report last month, which projected that the premiums for benchmark plans will increase about 15% from 2018 to 2019.

CBO blamed the premium hikes on three factors:

  • Insurers are no longer reimbursed for the costs of cost-sharing reductions through a direct payment;
     
  • A larger percentage of the population lives in areas with only one insurer in the marketplace;
     
  • Some insurers expected less enforcement of the individual mandate in 2018  โ€”which would encourage healthier enrollees to leave the market.

Although premiums are going up, the Avalere study also found that consumers in seven of the 10 states examined will have more silver plan options to choose from in 2019 than in 2018.

In Virginia, for example, the average silver plan options per region will more than double. However, enrollees in the District of Columbia, Maryland, and Washington will likely have one fewer exchange option per region in 2019 than in 2018.

"The rate filings suggest we may see increased competition and plan choice in many exchanges in 2019," Avalere Vice President Kelly Brantley said. "Greater plan choice will allow consumers to select a plan that best meets their health coverage needs."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


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