WASHINGTON — Nearly three years into President Donald Trump’s aggressive efforts to undermine the Affordable Care Act, prices for the most popular type of health insurance plan offered through the health law’s federal marketplace will actually drop next year, and the number of insurers offering plans will go up.
Administration officials credited Trump with the resiliency of the law even as they echoed his contempt for it.
“The ACA simply doesn’t work and is still unaffordable for far too many,” Alex Azar, the secretary of health and human services, said on Monday. “But until Congress gets around to replacing it, President Trump will do what he can to fix the problems created by this system for millions of Americans.”
The 4% price decline is only the second time that average monthly premiums have dropped year-to-year since the marketplace opened in 2014, and it is a sign that the health law is stabilizing after several years of turmoil caused in part by Trump. Open enrollment for “Obamacare” starts Nov. 1, but looming over it is an impending court decision on the law’s constitutionality in a case supported by the Trump administration that seeks to overturn the law.
Premiums rose sharply in the final years of the Obama administration, as Trump officials like to point out, largely because of losses insurers suffered as they tried to gauge the health needs of their new customers. But after Trump and Republicans in Congress tried unsuccessfully to repeal the law in 2017, the president took a number of steps to weaken it, all of which led to uncertainty that resulted in insurers raising prices.
Now, a correction is taking place. Some of the states with the biggest premium increases this year, including Delaware and North Dakota, will see the biggest decreases in 2020. There will be 20 more insurers selling plans next year in the federal marketplace, which is used by people in 38 states, bringing the total to 175. That will be the largest number of issuers since 2016. Only two states, Delaware and Wyoming, will have a single insurer selling plans under the law next year, compared with five states currently.
For a 27-year-old, premiums for a benchmark “silver” plan will cost an average $388 per month next year; for a family of four, they will average $1,520 per month. That is still expensive, but most people will qualify for federal subsidies that cover much or most of the cost.
For many of those who do not qualify for subsidies under the health law — people earning more than 400% of the poverty level, which comes to just under $50,000 for a single person — premiums will remain out of reach.
Deductibles, too, will continue to rise, with the median amount rising to $4,604, from $4,471, for silver plans, which offer midlevel coverage. But people whose income is at or under 200% of the poverty level will have much lower deductibles, thanks to a different kind of discount required under the law that helps with out-of-pocket costs.
Prices and other information about next year’s Affordable Care Act plans in the 13 states that have their own marketplaces will be announced by those states. In all, 10.6 million people had health plans through the federal and state marketplace plans as of March, the last time the Trump administration released enrollment data.
As the market stabilizes, the health law is coming to serve almost exclusively the struggling families and individuals who qualify for federally subsidized coverage. In a call with reporters Monday, Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, which runs the online marketplace, said that from 2016 to 2018, the number of health-law enrollees who did not qualify for premium subsidies dropped by 2.5 million people, or 40%.
“It was inevitable that Obamacare’s affordability crisis would eventually increase the number of uninsured,” Verma said, pointing to new census data showing a rise in the number of higher-income Americans without insurance.
In 2018, 8.5% of the population lacked health insurance, according to the Census Bureau, up from 7.9% in 2017. But that was driven in part by a decline in the number of children insured under government programs like Medicaid and the Children’s Health Insurance Program. The administration has taken steps to limit Medicaid eligibility for immigrants, and has supported efforts by some states to impose work requirements on Medicaid recipients.
The administration has also all but eliminated funding to promote enrollment under the law, through advertising and “navigators,” who once helped people sign up.
Verma and Azar praised Congress for zeroing out the tax penalty that the law imposed on people who go without health insurance; it did so as part of the 2017 tax overhaul. They also praised new rules pressed by Trump that encourage the sale of less expensive coverage that does not provide the comprehensive benefits required by the health law. Both moves, Verma said, elicited “a knee-jerk chorus of dire predictions” that had not come to fruition.
A major reason that premiums have stabilized, she said, is the reinsurance programs that the Trump administration has approved in 12 states. Under these programs, states help insurers pay their largest medical claims, partly using federal funds. Three of the states that will see the biggest drops in premium costs next year — Delaware, Montana and North Dakota — have adopted reinsurance programs, Verma said.
A bill to spread such programs across the country, drafted by Republican Sens. Lamar Alexander of Tennessee and Susan Collins of Maine, has yet to be brought to the Senate floor for a vote.
As always, how much people pay for a marketplace plan will heavily depend on where they live. Wyoming will have the highest average premiums next year — $723 a month for the benchmark plan for a 27-year-old, an increase of 2%. New Mexico will have the lowest average premiums — $282 a month for the benchmark plan for a 27-year-old, a decrease of 6%.
Asked about the court case seeking to invalidate the health law, Azar said a ruling in the plaintiffs’ favor would not change anything immediately because the defenders of the law would appeal to the Supreme Court.
“Our message would be, ‘Keep calm and carry on,’” Azar said. “There will be no immediate disruption to anybody. We will run the program the day after such a ruling the same way we ran the program the day before.”