ACA Premium Growth Has Slowed – Consumers Are Paying Less

Written by Jessica Adkins

December 21, 2016

According to a release entitled, “Marketplace Myths about 2017 Premium Rate Increases” from Healthcare.gov, the premium rate growth has slowed and consumers are actually paying less.

When it comes to the Marketplace coverage, the premium changes do not actually indicate what your client will pay. You must remember to factor into any applicable subsidies or tax credits, as about 82% of the 10 million individuals covered will receive some type of subsidy. Any individual or family falling under 450% of the Federal Poverty Line qualifies for some type of subsidy.

What does that mean for clients?

Most Marketplace consumers will be able to select a 2017 plan for less than $75 per month. Last year, the average cost of an ACA plan and a client receiving tax credits went from $102 to $106 per month, a $4 change, despite suggestions of “double-digit” price hikes.

More than 7 in 10 (about 75%) of current ACA enrollees could save an average of $682 in annual premiums for next year if they came back to the Marketplace to choose a lower cost, yet comparable metal tier plan.

It’s important to note, this year we have seen a number of adjustments, including some that are due to carriers underpricing in the beginning of the Health Care Reform Open Enrollment Period. Through 2016, however, most Marketplace plans remained well below initial projections from the independent Congressional Budget Office (CBO) suggestion and well below the comparable employer-sponsored coverage options.

In fact, 2016 ACA subsidy eligible plans were somewhere between 12% – 20% below what the CBO originally predicted for the OEP.

150 million Americans who participate in some type of employer-sponsored coverage has noted premium growth has slowed. 5 out of the last 6 years have seen the slowest growth rates on record. Last year, the employer-sponsored coverage plans only saw rate increases of about 3.4% compared to the average 8% growth prior to the  introduction of the SHOP Marketplace. In some cases, average state-wide premiums declined in the SHOP Marketplace for small employers with 1-50 employees.

For more information regarding premiums and ACA products available in your market, please contact a member of our Individual Health Sales Team at 800-962-4693.

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