Better Health Plan Deals for Many Young People, Despite “Sabotage”

Better Health Plan Deals for Many Young People, Despite “Sabotage”

Starting today and running through December 15, qualified Americans can buy health insurance through the Health Insurance Marketplace. The good news this year is that many Americans may pay less than last year. About 10 million young adults ages nineteen to thirty-four remain uninsured, many of whom may qualify for coverage and financial assistance.

Even though President Trump has taken actions to cause the Marketplace to “implode,” it hasn’t. Insurers are offering plans in every corner of the country. According to a new government report, over 70 percent of people will have a choice of plans from at least two different insurance companies; and Americans will have a choice, on average, of twenty-five qualified health plans. Those plans all offer a comprehensive package of benefits, like free preventive care, maternity visits, and prescription drug coverage, in addition to critical consumer protections thanks to the Affordable Care Act.

And while the president’s actions will raise premiums for some, it will reduce premiums for even more people. Specifically, the administration announced it would stop cost-sharing reduction (CSR) payments to insurers on October 12. CSR payments are passed through insurers to health care providers to reduce the amount that low-income consumers pay out-of-pocket when they see the doctor. Insurers are still required to reduce costs to consumers even without these payments from the government. To offset these unpaid costs, insurers increased 2018 premiums by an average of 20 percent, with many insurers focusing those premium increases on silver plans.

Higher-income people who do not qualify for financial assistance will bear the brunt of artificially high premiums caused by the Trump administration. The average benchmark silver plan premium will rise by 37 percent in states that use HealthCare.gov.

Yet, in 2017, 84 percent of Marketplace consumers received premium tax credits to lower the cost of coverage. Because tax credits on HealthCare.gov increase alongside premiums, such consumers will not experience this increase in their premiums—in fact, if consumers shop around, premiums for many plans could go down.

This holds true for young adults. Uninsured young people or young people currently in the individual market tend to be low-income. As a result, many young Marketplace shoppers will be able to purchase a silver plan at the same price as in 2017, or a bronze plan at an even steeper discount. In some states, they may find that gold plans are more affordable.

Here are the key statistics:

  • A government report shows that 80 percent of enrollees in states that use HealthCare.gov will be able to find a plan for less than $75 a month—up from 71 percent last year.
  • On average, low-income young adults can find coverage with either no or low premiums (see Table 1). For example:
    • A twenty-seven-year-old with an income of $20,000 would be able to purchase the lowest-cost plan in their Marketplace for $0 per month.
    • Savings for twenty-seven-year-olds with incomes of $25,000, $30,000, and $35,000 could be as much as 80 percent, 45 percent, and 31 percent, respectively.
  • Steep increases in advanced premium tax credits this year mean that, on average, young people who are currently uninsured and those who are currently insured in the individual market can find more affordable deals on the Marketplace this year. For example, in Oklahoma, Tennessee, Utah, and Wyoming, the average twenty-seven-year-old making up to $30,000 can find a zero-dollar premium plan in their Marketplace.
Table 1
 Average Change in the Benchmark Silver Plan and Lowest-Cost Plan in Federal Marketplace States

2017-2018 for a Twenty-Seven-Year-Old

 % Change in Lowest-Cost Plan Premium % Change in Second Lowest-Cost Silver Premium 
$20,000 Income -100% 0%
 $25,000 Income -80% 0%
 $30,000 Income -45% 0%
 $35,000 Income  -31% 0%
Income > $48,240 17% 37%

Source: Data for 2017 and 2018 average Marketplace premiums for the second lowest-cost silver and the lowest-cost plan sourced from a report released by the Department of Health and Human Services.

Note: Lowest-cost plan is defined as the lowest premium plan in the Marketplace as identified by the Department of Health and Human Services in its report. While this plan is likely a bronze plan, this is not necessarily the case in all rating areas.

Despite this silver lining of the Trump Administration’s CSR decision, higher-income people may not sign up for coverage due to its impact. And those higher-income people who do sign up may struggle to pay the increased premiums. The Bipartisan Health Care Stabilization Act, currently pending in Congress, would provide such enrollees with rebates in order to lower premium costs. But the fact remains: these Marketplace enrollees, in the aggregate, would be paying much less without the actions of this administration. Individual market plans were on track to make a profit this year. Premium increases for next year might have been in the single digits for Marketplace enrollees overall. An increase in enrollment by young people would be an encouraging outcome in spite of those lost opportunities.

Enrollment is now open: visit HealthCare.gov before December 15 to review your options and enroll.

Source: https://tcf.org/content/commentary/better-health-plan-deals-many-young-people-despite-sabotage/