Recent changes to the health insurance system will increase premiums on the federal marketplace substantially in 2019, according to a new analysis from the liberal Center for American Progress.
As part of the tax law passed last December, Republican lawmakers effectively eliminated the individual mandate in the Affordable Care Act by reducing the penalty for not having insurance to zero starting next year. The Congressional Budget Office estimated that the move would increase Obamacare premiums by 10 percent, largely due to the declining quality of the insurance pool as healthier customers dropped their coverage.
Additionally, the Trump administration has proposed expanding the availability of short-term health care plans that are not required to meet the standards laid out in the ACA. Customers with pre-existing conditions are generally not eligible for these lower-cost plans and are more likely to keep their Obamacare plans, leaving insurers on the federal marketplace with a less healthy and thus more expensive insurance pool. Insurers have reportedly already starting increasing prices for 2019 to reflect the potential change.
The net effect of this “marketplace sabotage,” as CAP calls it, is an estimated 16.4 percent increase in the average annual cost of a benchmark premium for a 40-year-old individual. (Benchmark plans are defined by the states according to rules established in the ACA. Details here and here.)
In dollar terms, CAP estimates that the national average premium for a benchmark plan for a 40-year-old will be $7,189 a year in 2019. Without the recent changes to the rules, the premium cost would have been $6,176. The figures vary considerably from state to state, ranging from no estimated change in Massachusetts to a $2,066 increase in Wyoming.
Read the complete analysis here.