Health insurance premiums in the ACA marketplace declined in most states for the third straight year in 2022, while premiums for employer-sponsored plans increased. "Several new factors affected insurers as they set premiums for 2022, including generous subsidies from the 2021 American Rescue Plan Act, increased outreach and enrollment spending by the Biden administration, and an increasing number of insurers in the marketplaces," according to a report from the Urban Institute. "Lower health premiums can help lower health care costs for consumers across the country."
Related: End to ACA tax credits could leave 3 million uninsured
The report includes several key findings: Between 2021 and 2022, national average benchmark premiums fell by 1.8%. Thirty-two states had benchmark premium reductions, and 18 experienced increases in 2022 (Florida had no change). This followed premium reductions of 3.2% in 2020 and 1.7% in 2021. In contrast, premiums for employer-sponsored insurance increased by 3.9% in 2020 and 3.6% in 2021. Premium prices varied considerably across states. Eleven states had average benchmark premiums above $500 per month for a 40-year-old nonsmoker, and six states had premiums below $365 per month. The variation in premiums depended, in part, on the types of insurers participating in a rating region. The presence of Blue Cross Blue Shield insurers, national and regional insurers, and provider-sponsored insurers was associated with greater-than-average benchmark premiums. The presence of a Medicaid insurer in a rating region was associated with lower benchmark premiums. The number of competing insurers was important. The presence of one insurer meant premiums would be $189.50 per month higher, on average, relative to a market with five or more insurers. Premiums also were lower if the rating region was in a state that expanded Medicaid, had a reinsurance policy or had a state-based marketplace. Two factors affected variations in the amount of the increase in benchmark premiums – higher unemployment rates and an increase in the number of insurers. The number of participating insurers in the 58 regions that were explored in-depth increased from 198 to 288 between 2020 and 2022. All types of insurers increased their participation in the Marketplaces, but the most striking development was the substantial premium increases by national commercial insurers UnitedHealthcare, Cigna and Aetna. "Overall, we saw reductions in premiums in 2022 in many states and localities," the report concluded. "About two-thirds of states had reductions in their average benchmark premiums. Large numbers of insurers reduced premiums, and we have suggested several reasons why this might have occurred. It is unclear from the data whether this owed to competitive pressures from existing and new insurers or expectations of a healthier risk pool because of ARPA subsidies and increased outreach funding, but the results are consistent for both explanations." Read more:
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