Delaware consumers still have affordable health coverage options next year

An estimated 74 percent of Delaware HealthCare.gov consumers could still purchase a plan for less than $75 per month, even if all final rates were to increase by double digits.

Since the Affordable Care Act became law, healthcare prices have risen at the lowest rate in 50 years, and premiums for the 150 million Americans with employer-sponsored insurance have grown at some of the slowest rates on record. Now, a new HHS analysis finds that HealthCare.gov consumers would continue to have affordable coverage options, even if all Marketplace final health insurance premium rates were to increase by double digits next year. In a hypothetical scenario where all rates increase by 50 percent, the vast majority of Delaware consumers (74 percent) would be able to purchase coverage for less than $75 per month, according to the report. All Marketplace premiums will be finalized and made public in October.

"Headline rate increases do not reflect what consumers actually pay," said Kathryn Martin, acting assistant secretary for planning and evaluation. "Our study shows that, even in a scenario where all plans saw double-digit rate increases, the vast majority of consumers would continue to have affordable options."

Two important features of the Marketplace protect Delaware consumers from the impact of rate increases.

Tax credits go up along with premiums. Tax credits are designed to protect consumers from rate increases and keep coverage affordable, increasing by whatever amount the cost of the second-lowest-cost silver, or benchmark plan increases. So if all premiums in a market go up by similar amounts, the large majority of consumers in that market will not have to pay more, since tax credits will increase in parallel.

Last year, despite headlines projecting double-digit rate increases, the average premium increased just $4 per month for www.HealthCare.gov consumers with tax credits, and 7 out of 10 Marketplace consumers could purchase 2016 coverage for less than $75 per month. Even if premiums and tax credits rise, the overall cost of the ACA is still below CBO's original projections. CBO's recent projections estimate that for 2019 coverage, ACA coverage will cost $49 billion less than originally predicted.

Consumers can shop around to find the best plan. Prior to the Affordable Care Act, it was almost impossible to shop around for health insurance. Not only were many Americans barred from coverage due to pre-existing conditions, but those who did have insurance through the individual market were often trapped in a plan, since people with even small health problems could be denied coverage or charged an exorbitant price if they tried to switch plans.

Today, any Marketplace consumer can purchase any plan during open enrollment, and Marketplaces let consumers compare prices, plan designs, and networks to find the best choice for them. Last year, more than 30 percent, or 5,719 returning Delaware HealthCare.gov consumers switched plans. They saved an average of $39 per month. Current Marketplace rates are well below initial Congressional Budget Office projections.

Independent researchers recently calculated that 2016 Marketplace rates are anywhere between 12 percent and 20 percent below what CBO initially predicted. 2017 Marketplace rate increases are subject to a number of predictable upward pressures that will dissipate next year.

The end of the ACA's temporary reinsurance program in 2016 puts upward pressure on 2017 rate increases that won't exist for 2018 and beyond.

Evidence suggests that some issuers priced below cost for 2014, reflecting the uncertainties of a new market and a desire to offer strongly competitive initial rates. With two full years of experience, many issuers are making one-time adjustments this year to bring premiums in line with observed costs.

CBO's projections show that the law is working to cover the uninsured, while costing less than expected. Recent estimates find that the law's coverage provisions will cost 28 percent less in 2019 than in CBO's original projections.

Marketplace and non-Marketplace consumers are benefiting from slow health care cost growth since the enactment of the ACA. Since 2010, per-enrollee costs in both public and private health insurance have grown more slowly than in previous decades – contributing to lower-than-expected costs in the Marketplace.

Meanwhile, the average premium for employer-sponsored family coverage rose about 4 percent in 2015, far below the almost 8 percent average rate seen from 2000 through 2010. Nationally, the average family premium was $2,600 lower in 2015 than it would have been if growth had continued at 2000-10 rates. Even with this significant slowdown, premium growth remains a challenge for businesses and families. That's why the administration is working to develop new, innovative ways of paying for care that align payment with improved outcomes and can help sustain and build on the slowdown in healthcare costs.

In the long run, Marketplace premium growth will also be determined by overall healthcare cost growth. For example, CBO has consistently predicted that Marketplace rates would grow faster than employer premiums for the first few years, but then grow at the same pace. That means Marketplace consumers will also benefit if slow healthcare cost growth can be sustained and the Marketplace advances in its stability and reaches a steady state.
The Marketplace is providing 25,379 Delaware consumers with coverage they value, because it improves their access to care and financial security.

Nearly 4 out of 5 Marketplace consumers are very or somewhat satisfied with their health insurance. Importantly, they are just as satisfied with their coverage as people with employer plans. Marketplace consumers are accessing primary, specialist, and other care they need at rates similar to people with employer coverage and far higher than the uninsured, thanks in part to moderate cost sharing. The share of families struggling to pay medical bills fell for all income groups between 2013 and 2015, and fell the most for the moderate-income families most likely to have gained coverage through the Marketplace.