The national average benchmark premium for a 40-year-old, non-smoker with an ACA-backed plan in 2021 was $443 a month, a decrease of 1.7% from 2020.
For the third straight year the national average benchmark premium in the Affordable Care Act marketplaces fell in 2021, while premiums increased for employer-sponsored plans, a new report finds.
The analysis by the Urban Institute found that the national average benchmark premium for a 40-year-old, non-smoker with an ACA-backed plan in 2021 was $443 a month, a decrease of 1.7% from 2020.
The decreases varied dramatically from state to state, with Iowa seeing a 31.3% drop in premium costs, down from $689 a month in 2020 to $474 per month in 2021. Alabama saw only a 0.2% increase, essentially unchanged at $550 a month. Minnesota had the lowest benchmark premium of $292 while Wyoming had the highest at $782, the report said.
In contrast, the Urban Institute cited Kaiser Family Foundation data showing that premiums for employer-sponsored insurance rose 4% in 2019 and 2020, with no data yet available for 2021.
A big factor determining the cost of premiums was competition within service areas.
"Insurer participation has been key to setting premium levels and influencing growth over time," the report said. "The number of insurers was a strong predictor of lower premiums; markets with only one or two insurers had substantially higher premiums than markets with five or more insurers."
Lower premiums were also associated with the presence of a Medicaid insurer, and states that expanded Medicaid or operated state-based Marketplaces also had lower premiums than states that did not.
“The number of insurers was a strong predictor of lower premiums; markets with only one or two insurers had substantially higher premiums than markets with five or more insurers.”
Urban Institute
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
Photo credit: BOISE,IDAHO/USA - DECEMBER 21 2013: Whitehouse.gov displays information about the Affordable Healthcare Act and directs to healthcare.gov to apply. By txking / Shutterstock
KEY TAKEAWAYS
The decreases varied dramatically from state to state, with Iowa seeing a 31.3% drop, down from $689 a month in 2020 to $474 per month in 2021.
Alabama saw only a 0.2% increase, essentially unchanged at $550 a month.
Minnesota had the lowest benchmark premium of $292 while Wyoming had the highest at $782, the report said.
In contrast, premiums for employer-sponsored insurance rose 4% in 2019 and 2020, with no data yet available for 2021.