Premiums for the most popular plan on Obamacare’s exchanges are expected to fall by 2 percent in 2019, Health and Human Services Secretary Alex Azar said Thursday in a speech pushing back on criticism that his agency is sabotaging the law.
“The president trying to sabotage the [Affordable Care Act] is proving better at managing it than the president who wrote the law,” Azar said Thursday during a speech in Nashville.
Azar added that insurers are starting to return to Obamacare’s insurance exchanges after leaving in recent years. He did not elaborate on how many insurers have joined on the exchanges.
Azar said that the premium decline is for Obamacare’s benchmark plan, which is the second-cheapest silver plan. The exchanges offer more expensive plans in the gold and platinum tiers, and cheaper plans in the bronze and silver tiers.
[Also read: Alex Azar bashes ‘Medicare for all’]
However, experts have said that several regulatory changes by the Trump administration could have a major effect on premiums, most notably the repeal of the individual mandate’s financial penalty starting in 2019. Insurers worry that the loss of the mandate could take away an incentive for younger people to sign up for Obamacare plans. Younger people are needed to offset high medical claims from sicker people.
Several states have also adopted reinsurance programs to help blunt potential premium hikes, which has contributed to lower rates in those states. Reinsurance works by having the state cover the highest claims from an Obamacare insurer, allowing the insurer to lower premiums overall.
Another key driver of high premium rates for 2018 was major uncertainty from the Trump administration, argued Larry Levitt, senior vice president for the research firm Kaiser Family Foundation.
“Premiums would be going down a lot if not for repeal of the individual mandate penalty and expansion of short-term plans,” Levitt tweeted on Thursday.
Levitt was referring to a new regulation to expand the duration of short-term plans from 90 days to nearly 12 months. The short-term plans are cheaper than Obamacare plans because they do not have to cover as many benefits and experts question if the plans could destabilize Obamacare’s exchanges because younger people would buy them instead of the exchanges.
An analysis from the Brookings Institution also estimated that premiums overall would lower by 4 percent without the mandate penalty repeal and the expansion of short-term plans.
But Azar said that Trump has taken “decisive action” to stabilize the law’s insurance exchanges, which are a part of the individual market that people who don’t get insurance through their job or the government use to get insurance.
However, Trump decided last fall to cut off insurer payments called cost-sharing reduction payments that reimburse insurers for lowering out-of-pocket costs for low-income Obamacare insurers.
