Analysis finds coverage options from Affordable Care Act to be economical with premium changes

ALBANY — A new U.S. Department of Health and Human Services analysis finds that healthcare.gov consumers will continue to have affordable coverage options, even if all marketplace final health insurance premium rates increase by double digits next year.

In a hypothetical scenario where all rates increase by 25 percent, 77 percent of Georgia consumers would be able to purchase coverage for less than $75 per month, according to a report released by HHS this week.

“The large majority will not have to pay significantly more,” said Katie Martin, acting assistant secretary for HHS Planning and Evaluation.

All marketplace premiums will be finalized and made public in October.

Tax credits are designed to protect consumers from rate increases and keep coverage affordable, increasing by whatever amount the cost of the second-lowest-cost silver, or benchmark plan, increases. If all premiums in a market go up by similar amounts, the large majority of consumers in that market will not have to pay more, since tax credits will increase in parallel, officials said.

Last year, the average premium increased $4 per month for healthcare.gov consumers with tax credits, and seven out of 10 marketplace consumers could purchase 2016 coverage for less than $75 per month. Even if premiums and tax credits rise, the overall cost of the Affordable Care Act is still below Congressional Budget Office original projections, officials with HHS said.

Officials said that, prior to the ACA, it was difficult to shop around for health insurance. Many had trouble due to pre-existing conditions, and those who did have insurance through the individual market were often trapped in a plan. However, data from last year show that more than 44 percent — or 141,010 returning Georgia healthcare.gov consumers — switched plans and saved an average of $48 per month.

Independent researchers recently calculated that 2016 marketplace rates are anywhere between 12 percent and 20 percent below what CBO initially predicted. The 2017 marketplace rate increases, HHS officials said, are subject to a number of predictable upward pressures expected to dissipate next year.

The HHS said CBO’s projections show the law is working to cover the uninsured while costing less than expected. Recent estimates found that the law’s coverage provisions will cost 28 percent less in 2019 than in CBO’s original projections.

“Healthcare.gov consumers and employers benefit from low health care cost growth,” said Ben Wakana, deputy assistant secretary for HHS Public Affairs. “(Costs are growing) more slowly than in previous decades.”

Officials say evidence suggests that some issuers priced below cost for 2014, reflecting the uncertainties of a new market and a desire to offer strongly competitive initial rates. With two full years of experience, many issuers are making one-time adjustments this year to bring premiums in line with observed costs.

The report was released on the heels of multiple insurance carriers announcing they would discontinue offering exchange plans in Georgia, leaving Blue Cross Blue Shield of Georgia as the only one that will be doing so in 2017.

In a press call earlier in the week, HHS officials told media representatives that entrances and exits in the marketplace are not unexpected, and that they are still encouraging people to explore their options even under circumstances in which competition is lacking in some states.

“In a county with low competition, uninsured rates in those areas are still going down,” Wakana said. “The idea of limited choices is not hampering the overall goal of the Affordable Care Act.”

Since 2010, per-enrollee costs in both public and private health insurance have grown more slowly than in previous decades – contributing to lower-than-expected costs in the marketplace. Meanwhile, the average premium for employer-sponsored family coverage rose about 4 percent in 2015, below the almost 8 percent average rate seen from 2000-2010, HHS officials said.

Nationally, the average family premium was $2,600 lower in 2015 than it would have been if growth had continued at 2000-2010 rates. In the long run, marketplace premium growth will be determined, in part, by overall health care cost growth, officials said.

The marketplace is providing 478,016 Georgia consumers with coverage. Officials with HHS report that nearly four out of five marketplace consumers are very or somewhat satisfied with their health insurance, and are just as satisfied with their coverage as people with employer plans.

Officials said the share of families struggling to pay medical bills fell for all income groups between 2013 and 2015, and fell the most for the moderate-income families most likely to have gained coverage through the marketplace.

To find the report, visit aspe.hhs.gov/pdf-report/effect-shopping-and-premium-tax-credits-affordability-marketplace-coverage.