Reports of the death of Affordable Care Act insurance markets are extremely premature. After years of steady price increases, insurer exits, and the Trump administration's relentless campaign to create instability, there are signs that in some states they are healthier than ever.
Rates for 2019, which have recently been announced for several states, will come down for many plans, according to the Kaiser Family Foundation. And for the first time since the exchanges opened in 2014, more insurers nationwide are entering the market than leaving. According to industry analyst Deep Banerjee, who follows insurers for S & P Global Ratings, the markets are in a better position now than they ever have been.
The rate reductions are far from universal, and prices in some states continue to rise, Kaiser noted. Consumers in Maryland will see a statewide average increase of 30 percent and those in Washington will see an increase of 19 percent. Much depends on whether a state has implemented market stabilization policies, like reinsurance. (Click here for an interactive map showing rate proposals for 2019 by state.)
Nevertheless, many consumers are in for a pleasant surprise. In Philadelphia, the average price for the second cheapest silver tier plan (the benchmark for calculating subsidies) for a 40-year-old nonsmoker is slated to come down by a whopping 24 percent, according to Kaiser. The statewide average increase for all plans in Pennsylvania is a mere 0.7 percent. A new insurer, Pennsylvania Health and Wellness, is entering the southeast Pennsylvania market, and the number of plans will increase in about half of Pennsylvania's counties, according to the state insurance department.
Nationwide, only four of 14 states for which overall average rates have been announced will see increases in double digits, according to Kaiser.
And for the 87 percent of enrollees who receive subsidies, the news is even better, according to Kaiser. Their actual cost for the benchmark silver tier plan will rise by a mere 2 percent in every state.
At the same time, the cost of employer coverage, which is independent of the ACA exchanges, is predicted to rise by an average of 5 percent nationwide, according to the National Business Group on Health's annual employer-sponsored health insurance survey. This is consistent with increases over the past five years and higher than the increases that some Obamacare consumers will see.
What's going on? Many experts believe that Obamacare insurance markets are finally starting to stabilize. After five years of testing the waters of a new kind of market, many insurers are beginning to figure out how to price their products in a sustainable way. They have even been able to factor in Trump administration efforts to drive younger and healthier consumer away, like eliminating the penalty for going uninsured starting in 2019, expanding the availability of bare-bones plans sold off the exchanges, and cutting funding for public information and outreach.
This is not to say that Obamacare markets are out of the woods. Threats still loom on the horizon for future years, including rising medical costs and further efforts by the Trump administration to destabilize them.
Obamacare premiums also remain a serious challenge for those consumers whose incomes are above the cut-off for subsidies, especially those just above that amount. They bear the full brunt of any rate increases, and their plight needs to be addressed.
Obamacare is still very much a work in progress and in need of numerous fixes. But recent insurer actions suggest that the basic marketplace structure for buying individual coverage could just work, if given enough time and support. And in the meantime, the rate of uninsurance in Pennsylvania is down to 5 percent, an all-time low.