Oct 30, 2017

ACA enrollees will see fewer choices next year

Competition has dropped sharply since the first ACA enrollment season. Photo: Alex Brandon / AP

Every year before open enrollment for the Affordable Care Act begins, the Department of Health and Human Services puts out a report that details the available options and costs in the states using HealthCare.gov.

That report will come out later this morning, but I got a sneak peek. Here's where things stand for the upcoming enrollment period.

  • Competition is down no matter you slice it: Just 45% of enrollees live in areas with three or more competing insurers, down from 75% in the first open-enrollment window.
  • Roughly 30% of people who get coverage through the ACA will only have one insurance company to choose from next year, and 26% will only have two.
  • The average enrollee has a total of 25 specific plans to choose from — down from 30 last year and 51 during the first enrollment period.

Premiums are up — but so are subsidies.

  • HHS' data confirm that premiums will, in fact, be considerably higher for 2018 coverage. For the "benchmark" plans available to a 27-year-old consumer — plans that falls roughly in the middle of the road in terms of both coverage and costs — premiums are up, on average, by 37%.
  • Those increases are especially high because benchmark plans have borne the brunt of the drama surrounding the ACA's cost-sharing subsidies. Premiums for the cheapest plan available to that same 27-year-old are up a more modest (but still not small) 17%.
  • The ACA's premium subsidies, which are tied to the cost of those "benchmark" plans, will also much more generous next year. The average subsidy, across all enrollees, will be 45% higher than it was this year.
  • That hypothetical 27-year-old, making $25,000 per year, would see the value of her subsidies rise by 73%.
  • That means subsidized consumers could end up paying substantially less next year than they have in the past, and in many cases will be able to get more generous coverage for the same price. Unsubsidized consumers will pay substantially more every month.

Be smart: President Trump's decisions on cost-sharing subsidies have contributed to the law's rising premiums and the resulting rise in subsidies. But he's not responsible for all of this. Competition, for example, took a big hit last year — when President Obama was still in charge.

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