Obamacare premiums for midlevel plans will fall by 4% next year, bucking predictions that premiums would soar after the Trump administration and congressional Republicans made changes to the healthcare law.
The drop in 2020 premiums, announced Tuesday, marks the second consecutive year that premiums will go down under President Trump. To go along with the decrease, more insurers are joining Obamacare exchanges, offering customers more options. A total of 175 insurers are offering plans across the U.S., an increase of 20 from the year before.
The trend begins to reverse double-digit premiums and mass insurer exits seen during former President Barack Obama’s last two years in office.
“The bottom line under President Trump: Costs are down and options are up,” said Health and Human Services Secretary Alex Azar in a phone call with reporters Monday.
The outcomes are despite the latest changes to the healthcare law. As part of the tax law, Republicans zeroed out, starting in 2019, the fine for going uninsured, known as the “individual mandate,” and the Trump administration is allowing people to buy plans outside of Obamacare’s rules. Democrats and pro-Obamacare groups warned these actions would have a devastating effect on the marketplace, but those predictions appear to have been off the mark.
“The president who was supposedly trying to sabotage the law has been better at running it than the guy who wrote the law,” Azar said.
Still, the Trump administration is facing other criticisms over Obamacare. The number of people without health insurance has risen under Trump, and the administration is also siding with Republican states in a lawsuit asking an appeals court to invalidate Obamacare in response to the individual mandate having been zeroed out. A decision on the case is expected in the coming weeks and may confuse customers when they go to sign up for coverage.
Despite the favorable news out Tuesday, health officials stressed in the phone call with reporters that health insurance premiums still priced out too many people.
The rates announced apply to silver plans, which are the midlevel plans on the healthcare.gov exchange. In dollar amounts, they are expected to cost an average of $388 a month, a total that does not include out-of-pocket expenses, such as deductibles.
The exchange was created under Obamacare to allow people who don’t get health insurance through a job or a government program to buy private coverage. How much people pay for coverage is determined by where they live, how much they make, their age, whether they smoke, and what type of plan they pick. Some people are even able to buy plans for $0 a month because of how much the government kicks in.
But middle-class people are priced out of getting subsidies if they make just over about $48,600 a year for an individual. People below that income threshold generally get subsidies from the federal government that make premiums less expensive and that protect them from price increases.
Many of those who make more choose to go uninsured or to go with options the Trump administration provided outside of the law, which are less expensive but don’t require that insurers cover sick people or charge them the same amount as healthy people.
Centers for Medicare and Medicaid Services Administrator Seema Verma took credit for the reduction in premiums and the entrance of new insurers, saying it was due to the administration’s “tireless work to mitigate the damage caused by Obamacare.”
One of the main ways that the administration was able to lower premiums was by approving reinsurance plans in a dozen states. The plans, which are supported by Democrats and Republicans alike, funnel federal dollars to pay for high medical claims. As a result, premiums fall for everyone on a healthcare plan.
The shopping period to sign up for health insurance will run for most states from Nov. 1 to Dec. 15, and starting a week before customers will be able to window-shop to see what plans will be available.
