The premiums for benchmark plans sold on the Affordable Care Act’s exchanges through HealthCare.gov are expected to decline by 2% in 2021 and more insurers are expected to sell plans, a new report finds.
The Centers for Medicare & Medicaid Services announced Monday that the premium decline is part of a larger trend with the insurance exchanges, where premiums for the average plan has declined by 8% since 2018.
Overall the premiums for the second-cheapest silver plan declined by 2% for 2021. That plan is a benchmark that CMS uses to calculate the amounts for tax credits that lower the cost of insurance.
The report applies to plans sold on the HealthCare.gov website, which residents in 38 states use to buy a plan on the exchange.
The lower premiums come as more plans are entering the exchanges. Overall 22 more insurers will offer plans in 2021, bringing the total to 181.
Some major insurers such as UnitedHealthcare have decided to expand their presence after leaving the exchanges due to mounting financial losses.
The exchanges suffered major premium hikes in 2016 and 2017 as insurers compensated for pricing plans too low when the exchanges went online in 2014. The population on the exchange was also sicker than insurers expected, which lead to higher costs.
The Trump administration touted the turnaround and pointed to several moves it made, such as lowering the open enrollment period to six weeks and clamping down on special enrollment periods.
“Our changes to the regulations and how we have managed the exchanges have proven to be more effective than the previous administration,” said CMS Administrator Seema Verma in a statement.
This year’s open enrollment will stretch from Nov. 1 through Dec. 15.
The report comes as insurers are struggling to figure out how the COVID-19 pandemic will affect healthcare costs in the next year.
An analysis from the Kaiser Family Foundation that looked at preliminary rate filings found a majority of insurers didn’t factor COVID-19 costs into their premiums. Several insurers reported in their filings that it was too soon to determine what healthcare costs will look like as the pandemic caused utilization to plummet.