Consumers can expect more carriers and lower premiums during open enrollment 2020, per newly released data from the Centers for Medicare and Medicaid Services (CMS). The agency reports a 2% drop in plan premiums for the second lowest-cost silver plan on the federal exchange for next year.
The second lowest-cost silver plan is used as a benchmark for setting cost sharing reductions. Overall, premiums for benchmark plans have dropped 8% on Healthcare.gov since 2018.
Subsides make a big difference in plan premiums. In 2021, a 27-year-old who earns 150% of the federal poverty level would pay only $57 a month for the lowest-cost silver plan available. For reference, a person earning 150% of the poverty level in 2020 earns $19,140 a year.
Without subsidies, that monthly premium jumps to $369 a month. Subsidies are also called advanced premium tax credits. They lower the monthly cost of health insurance for those earning between 100% and 400% of the federal poverty level.
According to CMS, 88% of enrollees were eligible for subsidies in plan year 2020.
Some enrollees also qualify for extra help in the form of cost-sharing reductions, which lower what consumers pay out of pocket for medical care.
In 2021, people who qualify for CSRs will see lower deductibles: $620 for a silver plan for someone who earns 150-200% of the federal poverty level and $74 for someone earning 100-150% of the poverty level.
Cost-sharing reductions are only available to people with incomes between 100% and 250% of the poverty level who choose a silver plan on the marketplace.
While most people qualify for tax credits to lower their premiums, not everyone does.
CMS is reporting a decrease in the number of people who sign up for coverage on the exchange if they don’t qualify for these cost-saving tax credits.
From 2018 to 2019, there’s been a decline in people enrolling without financial help. Unsubsidized enrollment is down nationwide, with significant declines in New Hampshire (71%), Virginia (26%), West Virginia (21%), Missouri (21%) and Kansas (21%).
New Hampshire alone went from nearly 55,000 unsubsidized enrollees in 2018 to just over 16,000 in 2019.
Lower enrollment among those who don’t qualify for tax credits suggests that premiums remain unaffordable for millions of Americans who don’t quite meet the cutoff for financial help.
CMS is also reporting an increase in the number of health insurance issuers on Healthcare.gov for next year. There will be 181 carriers on the marketplace in 2021, up from 22 last year.
Access to more plan options is also up for 2021. About 78% of Healthcare.gov users will have access to three or more carriers.
Nationwide, access has expanded.
In 2018, 29% of people using the federal exchange only had one insurer where they lived. That’s down to just 4% for 2021. Across the country, only 288 counties (9%) have a single issuer for 2021 while nearly half of all counties (48%) will have access to three or more for next year.
On average, people using Healthcare.gov in 2021 will have 60 plans to choose from: 22 bronze, 28 silver, 9 gold and 1 platinum.
Open enrollment to buy health insurance for 2021 starts on November 1st and ends December 15th.
