Urban Institute: Premiums for cheapest ACA silver plan fell across 31 states in 2020

Premiums for certain Affordable Care Act exchange plans fell across 31 states for the 2020 coverage year, a new study found.

The analysis released Thursday by the think tank Urban Institute found that premiums for a 40-year-old nonsmoker for the cheapest silver tier plan dropped by an average 3.5% across the states. The analysis attributed the decrease to the exchange markets stabilizing after massive uncertainty from 2017 to 2018.

“The individual market has clearly stabilized since the disastrous premium spikes of 2018,” said Kathy Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, which funded the study, in a statement. “But some markets remain uncompetitive, and affordability is a problem across the board for the unsubsidized.”

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In 2018, the average premium for the cheapest silver plan increased by nearly 30%. There was a small decrease of 0.4% in 2019.

There was some variation in premiums across states though. For example, Minnesota had the lowest premium with $298 and Wyoming had the highest with $871. Minnesota has a reinsurance program that aims to help insurers cover the highest cost claims.  

The analysis looked at the lowest cost silver plan because it had the most competition among ACA exchange plans.

“This was often created by the participation of at least one Medicaid insurer, several other non-Medicaid insurers offering plans, or the state instituting a reinsurance program—a reimbursement system that protects insurers from very high claims,” according to a release from the foundation.

But states with silver plans with high premiums typically had little competition, the analysis added.

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The analysis comes more than a week after the Trump administration announced that nearly 8.3 million people picked 2020 plans on HealthCare.gov, which residents in 38 states use to choose an exchange plan.

The total is a slight decline from the 8.4 million that signed up for the 2019 coverage year. The administration is still awaiting data on signups from the 12 states that run their own marketplace exchanges.

While premiums have stabilized and slightly declined, experts have also questioned the long-term prospects for growth, especially as the unsubsidized population has declined on the exchanges.