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Premiums for popular ACA health insurance dip for the first time

Seema Verma is the administrator of the Centers for Medicare and Medicaid Services.
Seema Verma is the administrator of the Centers for Medicare and Medicaid Services. (Jabin Botsford/The Washington Post)

The average price tag for the most popular level of insurance sold in the Affordable Care Act’s federal marketplaces is dropping slightly, the first time the rates have stopped going up since the health plans were created a half-dozen years ago.

In the 39 states that rely on, the monthly premium is dipping by 1.5 percent for 2019 in a tier of coverage that forms the basis for the ACA’s federal insurance subsidies, according to federal figures released Tuesday.

The figures also show that, after several years of defections, some insurers are returning to sell ACA health plans, and fewer consumers around the country will have only one insurance company in their marketplace.

In issuing this new portrait of the marketplaces on the cusp of the Nov. 1 yearly sign-up period, administration officials did an about-face from President Trump’s declarations since his campaign that the ACA was “dead” and its insurance exchanges were collapsing — a refrain popular among Republicans.

Seema Verma, administrator of the Department of Health and Human Services’ Centers for Medicare and Medicaid Services, credited the administration for improving the affordability and supply of ACA coverage. She said the Trump administration’s recent policies have stabilized the marketplaces, and she focused on a rule change to make it easier to rely on short-term health plans with relatively low prices that lack popular consumer protections.

“While some have publicly been accusing us of sabotage, we have been doing everything we can to mitigate the damage caused by Obamacare,” Verma said in a conference call with journalists.

Outside health policy analysts, however, challenged the administration’s reasoning, saying that the rates for ACA health plans were driven up last year in an overreaction to the administration’s maneuvers and that prices would have been even lower for 2019 if Trump and his health-care aides had not been altering the law.

In particular, policy analysts cited the president’s decision a year ago to abolish a type of subsidy that the 2010 law gave insurers to buffer the expense of providing discounts to lower-income customers for their out-of-pocket costs, such as deductibles. In response, insurers jacked up rates. But the loss of the “cost-sharing reduction subsidies” led to larger premium subsidies for most consumers — and unexpected profits for some insurers.

“The overwhelming reason average benchmark premiums are coming down in 2019 is because premiums went up by so much in 2018,” said Larry Levitt, senior vice president of the Kaiser Family Foundation, a health-policy organization.

And while Verma said that more insurance choices are holding down ACA rates, Levitt noted that the longer-lasting skimpy health plans she talked up are only now becoming available.

Insurers also have benefited from other steps the administration has adopted at the industry’s request, including shortening the annual enrollment period to six weeks and making it more difficult for customers to change their coverage at other times of the year.

The size of the decrease announced Tuesday is smaller than what HHS Secretary Alex Azar described in a speech last month in Nashville, where he predicted a 2 percent reduction in the average premiums in the most popular coverage: the second-lowest tier of “silver plans.”

The federal figures show a wide variation from state to state, with the average rates for the popular level of coverage dropping next year by 26 percent in Tennessee, while increasing by 20 percent in North Dakota. The figures span the states that use the ACA’s sign-up system. They exclude the remaining states and the District of Columbia, which run their own ACA enrollment systems.

Nor does the rate analysis cover two other main tiers of coverage that are available to ACA customers.

Still, the moderating prices for the most popular coverage will be helpful, in particular, to middle-class Americans — about 1 in 5 ACA customers — whose incomes place them above the threshold for the law’s insurance subsidies.

Last year, Trump officials predicted the marketplaces’ collapse on the fact that insurers were continuing to depart the exchanges, leaving an increasing number of counties and states with only one insurance company selling ACA health plans. In Tuesday’s briefing, Verma said the pattern has turned around. About 2 in 5 counties will have one marketplace insurer, compared with more than half last year, as will four states, compared with 10 last year.

During last year’s sign-up period, ACA proponents had warned that the administration’s actions would cause enrollment to plummet, but the number of Americans with such coverage, intended for people who do not have access to affordable coverage through a job, dropped only slightly — to nearly 12 million.

Verma said Tuesday that federal officials have not estimated how many people will sign up for the coming year, but that “when you have more moderate increases, or premiums go down, that might attract more people to the exchanges.”

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