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Analysis

Verma Touts 1.5% Drop in Benchmark Premiums for 2019

By Steven Porter  
   October 11, 2018

The data on second-lowest-cost silver plans for next year come two weeks after HHS Secretary Alex Azar praised President Trump for halting premium hikes, despite critics' contentions to the contrary.

Celebrating the news as "especially gratifying," Centers for Medicare & Medicaid Services Administrator Seema Verma released data Thursday morning showing that premiums for health plans on the federally facilitated exchange will drop next year for the first time since the Affordable Care Act took effect.

After years of double-digit increases, the average premium for second-lowest-cost silver plans will drop 1.5%, from $412 in 2018 to $406 in 2019, according to preliminary CMS data on the 39 states that use the federal ACA exchange. The final data are slated for release next month.

During a call with reporters, Verma said the ACA is still a broken piece of legislation that Congress should replace. Even so, President Donald Trump and his administration deserve credit for bringing these premiums down despite the less-than-ideal circumstances, she said, rejecting claims from critics who have argued Trump's team has been sabotaging the ACA since Inauguration Day.

"Despite predictions that our actions would increase rates and destabilize the markets, the opposite has happened," Verma said in a statement. "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."

"While we are encouraged by this progress, we aren't satisfied," she added. "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."

The release of 2019 premium data comes two weeks after Health and Human Services Secretary Alex Azar said benchmark ACA premiums would drop 2% next year. Azar heaped praise on Trump for the good news, but critics noted that rates are flattening out for 2019 after a significant jump for 2018 in response to the Trump administration's healthcare policymaking.

The 1.5% decrease follows last year's 36.9% increase, which was significantly higher than the 25.4% increase heading into 2017, according to the CMS data released Thursday.

Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation, said last month that insurers on the exchange "overshot" their premium increases last year, which explains both their high profit margins at present and the average decrease for next year. That being said, although the Trump administration has taken steps to undermine the ACA, some of the administration's actions have promoted stability, Levitt added Thursday.

Beyond premiums, though, Verma noted also that fewer insurers are dropping out of the exchanges, and some are returning. Most counties on the federal exchange, 56%, had only one issuer this year, but that figure will drop to 39% next year. There were 10 states with only one insurer this year, but that number will drop to four in 2019.

Clarification: The story has been updated to note that the data released Thursday are still preliminary. Final data are set to be released next month, according to a CMS official.

Steven Porter is editor at HealthLeaders.

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