Health insurance premiums on the individual marketplace are expected to drop 4% for the 2020 coverage year, according to CMS, which also stated it was the second consecutive year of declines.
Specifically, the 4% drop applies to a 27-year-old buying the benchmark plan premium on the individual market, or the average Healthcare.gov state’s second lowest silver plan. The plan saw a 1% drop in 2019. Out of 38 states on the federal exchange, 27 are seeing a decrease to this benchmark plan.
The 2020 coverage year also has 175 issuers compared to 132 in 2018.
However, the decline is not good news, according to the agency, as premiums are still unaffordable for many Americans as a result of the Affordable Care Act.
“This administration has made no secret about it: We believe the Affordable Care Act simply doesn’t work,” HHS Secretary Alex Azar said in prepared remarks Tuesday. “It is still unaffordable for far too many.”
According to Azar, Trump’s administration has made more affordable options for Americans. Yet, the administration has refused to support the ACA, and the DOJ took the extraordinary step not to defend the healthcare law in a Republican-launched lawsuit to overturn it. The case is currently in the appeals process after a judge declared the ACA unconstitutional last year.
“I said last year that President Trump, the president who was supposedly trying to sabotage this law, has been better at running it than the guy who wrote the law—and that has remained the case this year,” Azar said.
In 2018, the Trump administration expanded short-term limited-duration health plans that are not required to follow ACA requirements, such as essential health benefits or coverage for those with pre-existing conditions. The plans, which offer lower premiums, have been called “junk insurance” by critics as they do not offer much coverage and can leave patients on the hook for medical bills. Some websites advertising these plans have called them “Trumpcare” plans, which do not exist. President Trump, despite repeated promises of a “phenomenal health plan,” has not put forth a comprehensive plan for healthcare reform since he took office.
Other health insurance experts have stated that premiums are likely dropping because insurers raised prices so sharply during the early years of the ACA.
While Azar noted the decline for 2020, he still argued rates were too high.
“It must be emphasized that these premiums are still unaffordable for many. For instance, a 27-year-old single person buying the second-lowest cost silver plan in Nebraska is going to pay $583 a month for coverage, down from $687 in 2019,” he said. “That’s real savings. But she’s still going to be spending almost $7,000 a year on insurance premiums, when she could be making as little as $48,000 in income—and she will still have a sizeable deductible to spend through.”
In addition, despite lower premiums over the last two years, the uninsured rate has risen in the U.S. for the first time since the implementation of the ACA. In 2018, the number of Americans without insurance jumped from 25.6 million people in 2017, or 7.9% of the population, to 27.5 million, or 8.5%. Republicans in Congress also gutted the individual mandate in the 2018 Budget Act.
CMS again placed the blame of this increase on the previous administration, stating higher premiums meant Americans couldn’t afford ACA insurance.
Some Americans have also been kicked off their Medicaid insurance as of late as a result of new policy from the Trump administration. Over the last few years, CMS also allowed states to implement work requirements for their Medicaid programs. While only a handful of states have applied for the program changes, the effects are already being felt. Within the first few months of such a program in Arkansas, about 17,000 adults lost their insurance by the end of 2018. The policy is currently being challenged in court and has faced numerous litigation issues.
In contrast, when Medicare Advantage and Part D premiums for beneficiaries were expected to drop in 2020, CMS touted the change as a success.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."