While Waiting for ACA Decision, HHS Says 2020 Benchmark Plan Premiums Mostly Lower

HHS Secretary Alex Azar said his messaging about the Affordable Care Act (ACA) will be simple if the federal 5th Circuit Court of Appeals, in a decision that is expected any day now, sides with the administration in Texas vs Azar in finding the 2010 landmark health law unconstitutional.

"Keep calm and carry on," he said, as he and CMS Administrator Seema Verma released information about 2020 ACA premiums and health plan choices.

According to HHS and CMS, the average state premium for a silver plan is expected to fall 4% for a hypothetical 27-year-old for a plan in 2020 compared with the plan in 2019; 2019 plans were 1% lower from the year before. Six states will see their benchmark plan premiums fall 10% or more in 2020—Delaware, Montana, Nebraska, North Dakota, Oklahoma, and Utah.

Three states—Indiana, Louisiana, and New Jersey—will see average benchmark plan premiums rise 10% or more. Verma attributed the 11% increase in New Jersey to the state's decision to retain an individual mandate penalty, which the administration did away with in its 2018 tax reform law.

In addition, there are more issuers offering qualified health plans in 2020 compared with 2019, with 175 plans, up 20 from 2019. HHS said that, out of the 38 states participating in the federal exchange, 15 states have more payers participating, and 28 states have counties with more issuers.

Despite those seeming successes, Azar and Verma called the law fundamentally flawed; however, Azar said neither he nor Verma have talked with Republicans who are slated to issue what a replacement healthcare plan would look like, possibly today.

Premiums are still unaffordable, they said, and a "new class of uninsured" has been created—meaning middle-income workers who do not qualify for subsidies.

Using their 27-year-old again as an example, one who is eligible for a tax credit with household income at 150% of the federal poverty level, the individual would have an average silver plan premium of $52 while someone who is not eligible would have an average silver premium of $374.

Katherine Hempstead, PhD, a senior policy advisor at the Robert Wood Johnson Foundation, said in comments shared with The American Journal of Managed Care^® that it looks “like a second positive year for the individual market. More than half of the states on the healthcare.gov platform saw increased participation in at least one county. The two states that have one issuer statewide are very small (Del) or very rural (WY), so this is a big improvement from last year.”

She also said that only 12% of enrollees will have no choice of insurer next year, which she decsribed as not "the typical experience in the marketplace."

Regarding states with large price increases, particularly New Jersey and Indiana, Hempstead had a different take than Verma. They "are very low priced and did not have large price increases in 2018. Both are still relatively low priced states. So we may be seeing a little convergence," Hempstead said.

The administration is asking a federal appeals court in New Orleans to overturn the entire ACA as it took the unprecedented step of not enforcing the constitutionality of a US law. Sign-up season starts November 1 in most states and ends December 15, during which the appeals court in New Orleans could issue its ruling.