How Premiums Are Changing In 2018
NOTE: A more recent version of this analysis, for 2019, is available here.
The premiums for 2018 Marketplace plans were recently released to give consumers a chance to look at their plan options before open enrollment begins on November 1. Premiums are rising significantly in many counties across the country, in part due to the decision of the Trump Administration to cease payments to insurers for cost-sharing reductions. Insurer participation also declined in many areas, leaving more counties with only one insurer, which likely contributed to the high rate of premium growth.
The map below illustrates how premiums changed for 2018 by looking at the change in the lowest-cost bronze, silver and gold plans by county. Results are shown for a 40-year-old paying the full premium and for a 40-year old with an income of $20,000 (166% of poverty), $25,000 (207% of poverty), $30,000 (249% of poverty), $35,000 (290% of poverty), and $40,000 (332% of poverty), who would be eligible for a premium tax credit.
Percent Change in Lowest-Cost Metal Plan Before and After Tax Credit, 2017-2018
Nationally, the unsubsidized premium for the lowest-cost bronze plan is increasing an average of 17% between 2017 and 2018, the lowest-cost silver plan is increasing an average of 32%, and the lowest-cost gold plan is increasing an average of 18% (Table 1). These average increases are weighted by the number of plan selections by county in 2017 (see Methods). Premiums for silver plans are rising much more than those for bronze or gold plans because in many states insurers loaded the cost from the termination of the cost-sharing reduction payments entirely on the silver tier.
For consumers who receive premium tax credits, the amounts that they will have to pay will often be lower in 2018 (Table 2). The particularly large increase in premiums for silver plans means that tax-credit-eligible Marketplace enrollees will see much higher premium tax credits (which are calculated based on the second-lowest-cost silver plan in each area). These large credits make gold plans more easily attainable and make bronze plans much cheaper (or even available at no additional premium). In fact, after these increases, the lowest-cost gold premium is lower than the lowest-cost silver premium in 478 counties.
For example, a 40-year-old individual making $35,000 (249% of poverty) and eligible for a tax credit will on average pay 36% less in 2018 for their share of the premium for the lowest-cost bronze plan, 6% less for the lowest-cost silver plan, and 12% less for the lowest-cost gold plan. The savings are greater for subsidized enrollees with lower incomes and less for those with higher incomes (Table 2). The premiums for bronze plans may be particularly attractive to many people eligible for premium tax credits. For example, the tax credit for a 40-year-old individual making $25,000 covers the full cost of the premium for the lowest-cost bronze plan in 1,679 counties (Table 3).
| Table 1: Average Change in the Lowest-Cost Premium by Metal Level Before Tax Credit, 2017-2018 for a 40-year-old | ||
| % Change in Lowest Cost Bronze Premium | +17% | |
| % Change in Lowest Cost Silver Premium | +32% | |
| % Change in Lowest Cost Gold Premium | +18% | |
| SOURCE: Kaiser Family Foundation analysis of premium data from Healthcare.gov and review of state rate filings. | ||
| Table 2: Average Change in the Lowest-Cost Premium by Metal Level After Tax Credit, 2017-2018 | |
| 40-year-old with $20,000 income (166% of poverty) | |
| % Change in Lowest Cost Bronze Premium | -85% |
| % Change in Lowest Cost Silver Premium | -14% |
| % Change in Lowest Cost Gold Premium | -26% |
| 40-year-old with $25,000 income (207% of poverty) | |
| % Change in Lowest Cost Bronze Premium | -69% |
| % Change in Lowest Cost Silver Premium | -10% |
| % Change in Lowest Cost Gold Premium | -20% |
| 40-year-old with $30,000 income (249% of poverty) | |
| % Change in Lowest Cost Bronze Premium | -50% |
| % Change in Lowest Cost Silver Premium | -8% |
| % Change in Lowest Cost Gold Premium | -16% |
| 40-year-old with $35,000 income (290% of poverty) | |
| % Change in Lowest Cost Bronze Premium | -36% |
| % Change in Lowest Cost Silver Premium | -6% |
| % Change in Lowest Cost Gold Premium | -12% |
| 40-year-old with $40,000 income (332% of poverty) | |
| % Change in Lowest Cost Bronze Premium | -24% |
| % Change in Lowest Cost Silver Premium | 1% |
| % Change in Lowest Cost Gold Premium | -6% |
| SOURCE: Kaiser Family Foundation analysis of premium data from Healthcare.gov and review of state rate filings. | |
| Table 3: Number of Counties Where an Individual’s Tax Credit Covers the Full Premium of the Lowest-Cost Bronze Plan in 2018, for a 40-year-old | |
| Example Age and Income | Number of counties where the tax credit covers the full premium for the lowest-cost bronze plan |
| 40-year-old with $20,000 income (166% of poverty | 2434 |
| 40-year-old with $25,000 income (207% of poverty) | 1679 |
| 40-year-old with $30,000 income (248% of poverty) | 488 |
| 40-year-old with $35,000 income (290% of poverty) | 169 |
| 40-year old with $40,000 income (332% of poverty) | 104 |
| SOURCE: Kaiser Family Foundation analysis of premium data from Healthcare.gov and review of state rate filings. | |
The map below shows where an individual’s tax credit covers the full premium of the lowest-cost bronze plan for a 40-year-old with an income of $20,000 (166% of poverty), $25,000 (207% of poverty), $30,000 (249% of poverty), $35,000 (290% of poverty), and $40,000 (332% of poverty).
Counties Where the Lowest-Cost Bronze Plan Premium Costs Zero Dollars After the Tax Credit in 2018
The map below shows counties where the unsubsidized premium for the lowest-cost gold plan has a lower or comparable premium to the lowest-cost silver plan in 2018.
Counties Where the Lowest-Cost Gold Plan Costs Less than the Lowest-Cost Silver Plan
Discussion
The differences in premium changes across plan types and the peculiar effect these differences have on plan costs for both unsubsidized and subsidized enrollees makes it important that consumers shop around and carefully consider their options. Although CMS will no longer be paying insurers for reducing the cost sharing for lower-income enrollees, insurers remain obliged to provide the reduced cost sharing policies to eligible Marketplace enrollees. These policies generally have higher actuarial values than gold plans for enrollees with incomes below 200% of poverty so consumers will need to carefully consider whether it makes sense to switch even though gold-plan premiums may be comparable or less than silver plans. Consumers eligible for cost sharing reductions also will need to weigh the much lower premiums they would pay for a bronze plan with the much higher cost sharing they could encounter if they need care.
Methods
We analyzed data from the 2017 and 2018 Individual Market Medical files to determine premiums and the benchmark amounts to calculate premium tax credits for the scenarios presented. These files are available at data.healthcare.gov. The 2017 data were from the 2017 QHP Individual Market Medical file dated 8-11-2017. Premiums from the 12 state based marketplace are from a review of state rate filings and plan finders. California premium data were from 2018 and 2017 Product Prices for all Health Insurance Companies and Products by Zip Code files made available by Covered California. Massachusetts premium by zip code data in 2017 and 2018 were from Massachusetts Health Connector. Where premiums and benchmark amounts varied by zip code within a county, the benchmark for the majority of enrollees within the county was used.
The average changes in plan costs were weighted by county using 2017 plan selections obtained from the 2017 Marketplace Open Enrollment Period County-Level Public Use file provided by CMS and available here. In states running their own exchanges, we gathered county-level plan selection data where possible, and if unavailable estimated county plan selections based on the county population in the 2010 census and total state plan selections in the 2017 OEP State-Level Public Use File provided by CMS and available here. Massachusetts enrollment by zip code data in 2017 were from Massachusetts Health Connector, with adjustments made to match total state plan selections in 2017.