The average monthly premium for an Affordable Care Act benchmark plan will increase 37% next year, according to a new report from the federal government.
But while the average premium for the second-lowest-cost silver plan will rise from $300 to $411, advance premium tax credits will also rise—by an estimated 45%. More than 80% of enrollees were in plans that received those tax credits this year, noted the Department of Health and Human Services report (PDF).
Those eligible for tax credits may end up paying a lower portion of their premiums compared to prior years, especially if they select plans from metal levels other than silver, HHS says. Some may even be able to obtain free health insurance.
The report also notes that insurer and plan choices for enrollees have decreased. Twenty-nine percent of current enrollees will have only one issuer to choose from, up from 20% this year, and the average number of qualified health plans available dropped from 30 to 25.
This decrease in competition likely is one factor driving premiums upward. But another major reason is the Trump administration’s own actions, in particular, the decision to stop funding cost-sharing reduction payments.
In fact, a recent analysis from the Kaiser Family Foundation found that many insurers added surcharges to their silver level plans—ranging from 7% to 38%—in an effort to absorb the financial impact of the loss of CSR payments.
As noted in the HHS report, many consumers will be protected from these increases as subsidies rise in tandem, but that just means taxpayers will pick up more of the tab.
Legal tug-of-war over CSR payments continues
While a federal judge ruled in 2016 that CSR payments are being illegally funded, the Obama administration appealed that decision, and the case has been on hold since President Donald Trump has been in the White House.
This week, the House of Representatives and the Trump administration asked (PDF) the court keep the case on hold, citing the decision to cut off funding for the subsidies.
“In light of the changed circumstances, plaintiff and defendants are actively discussing the disposition of this case and hope to file a motion with this court in furtherance of those efforts in the coming weeks,” they wrote.
But the group of attorneys general who intervened in the case has asked (PDF) the court to let it move forward, arguing that since the damage has already occurred with respect to the 2018 plan year, “there is a pressing need for final resolution of the important issues pending before this court.”