2019 Premiums for ACA Silver Plans Will Be 16 Percent Higher Than They Would Have Been Absent the Repeal of the Individual Mandate, Expansion of Short-Term Plans and Loss of Federal Cost-Sharing Payments, Analysis Finds

Although 2019 premiums for plans in the Affordable Care Act marketplaces are flat or falling in many parts of the country, they would be substantially lower still if not for several Trump administration-backed changes to private insurance markets, finds a new KFF analysis.

ACA silver-level plans sold in the marketplaces will cost an average of 16 percent more than they otherwise would have, thanks to the combined effects of the loss of ACA cost-sharing reduction payments, the repeal of the ACA’s individual mandate penalty, and the expansion in the availability of more loosely-regulated plans, the analysis of insurer filings finds. In dollar terms, that means that 2019 benchmark silver plan premiums for a 40-year-old on healthcare.gov would have averaged $427 per month in 2019, instead of the $495 per month recently reported by the Department of Health and Human Services.

More broadly, the analysis finds that premiums for all ACA-compliant plans — including those sold both on- and off-exchange — will on average be 6 percent higher than they otherwise would have been based on what insurers explicitly reported in their 2019 rate filings were the effects of the repeal of the individual mandate penalty and the expansion in the availability of short-term and association health plans. This is likely a conservative estimate, since some insurers also increased premiums in 2018 based on an expectation that the individual mandate might be repealed or weakly enforced.

Repealing the mandate penalty and expanding the availability of short-term plans and association health plans effectively siphons healthy people from the ACA marketplaces, driving up premiums as insurers’ risk pools include a larger share of sick people relative to healthier ones. The stripping of federal payments that insurers used under the ACA to lower the cost-sharing burden of some customers caused insurers to raise premiums to recover costs that they subsequently had to bear themselves, in many cases increasing premiums only for silver plans.

Consumers eligible for federal premium tax credits in the ACA marketplaces are shielded from the effect of higher premiums. But for unsubsidized consumers and those who buy ACA-compliant policies off-exchange, recent premium hikes have made health insurance increasingly less affordable in recent years, effectively pricing some of them out of the market.