Average premiums on the federal marketplace will decline for the first time since Affordable Care Act plans become available in 2014, according to new data released by the Centers for Medicare & Medicaid Services (CMS) on Thursday.
On average, premiums for silver plans across 39 states on the federal exchange will drop 1.5% in 2019, according to the agency. During year’s open enrollment average silver plan premiums increased 37%.
Participation in the ACA marketplace has also increased with 23 new insurers, including re-entry from large payers like Anthem, Molina and Cigna. Twenty-nine insurers have expanded their reach, bringing the percentage of counties with just one insurer down from 56% last year to 39% in 2019.
The average decrease comes despite accusations from critics that the Trump administration has sabotaged the exchanges by repealing the individual mandate, cutting of cost-sharing reduction payments and slashing funding the Affordable Care Act’s Navigator program.
“Today after all of these allegations that have been thrown at CMS time and time again, I’m happy to announce the proof that while critics have consistently made promises and predictions that have been definitively proven untrue, we’ve have been working tirelessly to fulfill the promises we made to stabilize the market to give American’s more choices and make real progress in lowering premiums,” CMS Administrators Seema Verma told reporters on Thursday.
Verma credited the lower premiums to actions by the Trump administration, including a market stabilization rule released shortly after Trump took office that shorted the open enrollment period and provided more flexibility in plan design. CMS has also approved reinsurance waivers in seven states which have helped keep premiums down.
She also pointed to the administration’s move to expand short-term plans as a mitigating factor, arguing that the availability of such plans has not raised premiums as many predicted. Critics have called the insurance "junk plans," and Democrats tried and failed to repeal the rule on Wednesday.
However, policy experts said ACA premium stabilization is more of a market correction than changes by the Trump administration. ACA profits have skyrocketed over the last several years, with insurers pulling in $155.70 in average gross margins per member each month in the second quarter of 2018.
One big reason insurers are lowering premiums: Individual market insurers are currently so profitable it would be hard for many companies to justify a rate increase. https://t.co/SL5COs5BR3— Cynthia Cox (@cynthiaccox) October 11, 2018
This profitability is also probably attracting new entrants and returning companies. pic.twitter.com/jNevOOE5mp
While some actions by the Trump administration have had a stabilizing impact, cutting cost-sharing reduction payments last year have drove premiums up, Kaiser Family Foundation’s Cynthia Cox tweeted.
And while Verma called this year's premium decrease “dramatic” when compared to the last several years and categorized marketplace stabilization as “real progress,” she maintained her position that the ACA is failing consumers.
“This is by no means a celebration,” she said, adding “the law needs to change.”