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Premiums for Most Popular Type of Obamacare Plan Will Drop Next Year

WASHINGTON — Prices for the most popular type of health insurance under the Affordable Care Act will drop slightly next year in the federal marketplace, after several years of rapid increases, the Trump administration said on Thursday.

Specifically, it said, the average premium for the second-lowest-cost plans offering midlevel coverage will decline next year by 1.5 percent, the first time this benchmark has declined since the federal insurance exchange made its debut in 2014.

“Though the average decrease is small, it is a dramatic and very positive change from the double-digit increases experienced over the past two years,” said Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, which runs the online marketplace serving 39 states.

From 2017 to 2018, the benchmark rose 37 percent, officials said, and in the prior year it rose 25 percent.

Ms. Verma said the new numbers vindicated Trump administration policies that many health care experts say have destabilized insurance markets.

“While some have publicly been accusing us of sabotage, the reality is that we have been working hard to do everything we can to mitigate the damage caused by Obamacare,” Ms. Verma said, adding, “Our actions have succeeded.”

But those claims require some context.

Insurers initially lost hundreds of millions of dollars in the Affordable Care Act marketplace. President Trump and Republicans in Congress tried to repeal the law and then to undo it piece by piece. To make up for all the uncertainty, and for financial losses in their first years under the law, insurers demanded big rate increases, to bring their revenues into line with their costs.

“Individual market insurers are currently so profitable that it would be hard for many companies to justify a rate increase,” said Cynthia Cox, an insurance expert at the Kaiser Family Foundation. This profitability, she said, is probably attracting some insurers to the market and prompting others to return.

Ms. Verma said that “Anthem, Wellmark, Molina and Cigna are returning to the markets after leaving in 2016 and 2017.”

All told, Ms. Verma said, there will be 23 more insurers in the federal marketplace next year, and 29 current participants will expand into additional counties. The number of states with just a single insurer on the federal exchange will drop to four, from 10 this year, she said.

The sixth annual open enrollment period starts in three weeks, on Nov. 1, and continues to Dec. 15. Consumers expecting to save money must carefully compare options.

To get the benefit of the lower rates, consumers will, in many cases, need to switch to a different plan, with a different network of doctors. The benchmark premiums for midlevel “silver plans” are used to calculate the subsidies available to consumers, so when benchmark premiums go down, subsidies may also go down.

Benchmark premiums for a 27-year-old in the federal marketplace will average $406 a month next year, officials said. The amount that rates will go down, or up, varies substantially by state. Tennessee has by far the largest reduction in its benchmark premium, 26.2 percent, officials said. For a 27-year-old nonsmoker, this means a monthly premium of $449, down from $608 this year.

Other states with large percentage reductions in benchmark premiums, as reported by the Trump administration on Thursday, were New Hampshire, down 15.2 percent to $330 a month for a 27-year-old; New Jersey, down 14.7 percent to $289; New Mexico, down 14.3 percent to $299; and Pennsylvania, down 15.9 percent to $397.

States with the largest increases in benchmark premiums next year are Delaware, up 16.1 percent to $561 a month; Hawaii, up 12.5 percent to $404; and North Dakota, up 20.2 percent to $375.

Wyoming has the highest benchmark premiums, which will remain unchanged at $709 a month.

About 8.7 million people signed up last fall for insurance using, the website for the federal marketplace.

Ms. Verma did not announce a numerical goal for the coming enrollment period. But she said the prospect of more moderate rate increases and, in some cases, rate reductions “might attract more people.”

Mr. Trump has repeatedly described the Affordable Care Act as “a disaster” and predicted that it would implode. He cut off billions of dollars in cost-sharing payments to insurers last October. And he boasted at a political rally last week that he had “mostly obliterated Obamacare.”

But with opinion polls showing that the law has become more popular, the Trump administration has altered its message, saying it knows how to make the law work better.

Critics of the administration said premiums would be even lower next year but for actions by the president and Congress that undermined the Affordable Care Act. Congress repealed the penalty for people who go without health insurance, and new rules issued in August encourage the sale of short-term plans that do not provide the full range of benefits required by the health law.

In addition, the administration is supporting a legal challenge to the law, by Texas and 19 other states, that could upend the fragile equilibrium in insurance markets.

But some actions by the Trump administration have pleased insurers and made the marketplace more attractive to them. Officials have carried out an executive order issued by Mr. Trump on his first day in office that directed them to minimize the “regulatory burdens” of the Affordable Care Act and give states “more flexibility and control.”

The administration has granted waivers to seven states allowing them to set up programs that help pay the largest claims with a combination of state and federal funds. These programs — in Alaska, Maine, Maryland, Minnesota, New Jersey, Oregon and Wisconsin — reduce the costs borne by insurers and enable them to reduce premiums below what they would otherwise charge.

Premiums generally rise with age and, in some states, can exceed $1,000 a month for people in their 50s and 60s. More than 80 percent of people who buy insurance on the exchange qualify for tax credits that reduce the cost. The Trump administration has expressed particular concern for people who must pay the full unsubsidized cost.

DMU Timestamp: September 17, 2018 17:21

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