Premiums for HealthCare.gov Plans Are Lower for Third Consecutive Year
Today, the Centers for Medicare & Medicaid Services (CMS) released a report showing the trend of lower premiums and increased issuer participation for HealthCare.gov will continue for 2021 year. The average premium for the second lowest cost silver plan (also called the benchmark plan) dropped by 2% for the 2021 coverage year and, when looking at states that are using HealthCare.gov in both 2020 and 2021, 22 more issuers will offer coverage in 2021, for a total of 181 issuers delivering more choice and competition for consumers.
“Bottom line – The President has delivered, lower cost and more choice,” said CMS Administrator Seema Verma. “Our changes to the regulations and how we have managed the Exchanges have proven to be more effective than previous administrations.”
The report shows the third consecutive year of improving market conditions under the Trump Administration’s new policies. Three years of declining average benchmark plan premiums combine to deliver an 8% premium reduction across HealthCare.gov since the 2018 coverage year. Looking at the coming year, four states will see double-digit decreases in the average benchmark plan premiums for 27 year olds, including Iowa, Maine, New Hampshire and Wyoming. For two of these states - Maine and New Hampshire - CMS has used its authority to approve State Innovation Waivers under Section 1332 of the Patient Protection and Affordable Care Act to establish state-based reinsurance programs, contributing to the decline in premiums.
Issuer participation will also increase for the third year in row, which represents a dramatic increase in choice for consumers. As more issuers offer coverage, the percentage of HealthCare.gov enrollees with access to only one issuer is decreasing from 29% in 2018 to 4% in 2021, and more than three quarters of HealthCare.gov enrollees will have access to at least three issuers in 2021. To show this improvement from a geographic perspective, CMS also released the 2021 Issuer Participation County Map for states with Exchanges that use HealthCare.gov as well as State-based Exchanges showing greater consumer choice. The map covers the entire country and shows the portion of counties with only a single issuer dropped from 50% in 2018 to 24% in 2020 and will drop further to 9% in 2021. For 2021, there will be 288 counties nationwide with a single issuer offering plans through the Exchange, down over 80% from a high of 1,582 counties with a single health insurance issuer offering plans through the Exchange in 2018.
While today’s report shows the Administration’s efforts to stabilize the market are working, average premiums are still significantly higher than when the Affordable Care Act (ACA) was first implemented and affordability remains a significant challenge for people who do not qualify for a premium tax credit and must pay the entire premium themselves. The average benchmark plan premium for a typical family of four has increased from $794 in 2014 - the first year the ACA’s main requirements were introduced - to $1,486 in 2021. As premiums increase, a recent report by CMS on enrollment among people with and without subsidies documents how unsubsidized enrollment continues to decline, suggesting middle income Americans continue to struggle to afford coverage.
Consumers will be able to start enrolling in plans for the 2021 plan year beginning on November 1, 2020, which marks the beginning of the annual Open Enrollment Period for the individual market Exchanges. The Health Insurance Exchange 2021 Open Enrollment Period is November 1, 2020 to December 15, 2020, with coverage beginning on January 1, 2021.
Ahead of the Open Enrollment Period , CMS is also releasing the HealthCare.gov scheduled maintenance windows for the upcoming Open Enrollment Period. Every year, CMS establishes scheduled maintenance windows that provide periods of time when CMS and its partners can make updates or resolve issues, if needed. Consumer access to HealthCare.gov may be limited or restricted when this maintenance is required. The purpose in scheduling these times is to minimize any consumer disruption. Regularly scheduled maintenance will continue to be planned for the lowest-traffic time periods on HealthCare.gov, which are Sunday mornings. Maintenance will only occur within these windows when deemed necessary to provide consumers with a better shopping experience. While maintenance time during Open Enrollment can vary from year to year due to various factors, last year HealthCare.gov was available 96.9% of the time. This year’s scheduled maintenance windows are similar to previous years.
To view the 2021 Health Insurance Exchange Premium Landscape Issue Brief, visit: https://www.cms.gov/CCIIO/Resources/Data-Resources/Downloads/2021QHPPremiumsChoiceReport.pdf
To see the 2021 Issuer Participation County Map; visit: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/Downloads/10-16-2020-County-Coverage-Map.pdf
To view the Scheduled Maintenance Windows, visit: https://marketplace.cms.gov/technical-assistance-resources/2021-open-enrollment-healthcaregov-maintenance-windows.pdf
To view the Trends in Subsidized and Unsubsidized Enrollment; visit: https://www.cms.gov/newsroom/press-releases/unsubsidized-enrollment-individual-market-dropped-45-percent-2016-2019-0