Health Insurance Has Changed. What Are We Doing About It?

On April 3, 2018, CMS released the Health Insurance Exchanges 2018 Open Enrollment Period Final Report. We here at Venture Insurance Group are interested in the report because…well, we’re obsessed with insurance. If you pay for your own health insurance, there are others facing similar challenges. Knowing what others have done may help you decide what you want to do.

Here is a link to the full report.

1 – Premiums Increased (but for whom?):

Consider the following true statements:
-The average premium nationally before tax credit was $621 (up 30% from $476 in 2017).
-The average premium nationally was $153 after tax credit.
-The average individual qualified for a tax credit which lowered their premium (83% of consumers received a tax credit).
-The average consumer chose a Silver-level plan (63%).
-Of those who received a tax credit, the average (82% of those qualifying) income was below 250% of federal poverty level and therefore claimed a large subsidy.
-Of those who received a tax credit, the average premium was $89.
-Of those who did not receive a tax credit, the average premium was $522.

Is there strong correlation between these statistics?

Yes. Marketplace plans offer a good solution for many people. But for those who receive little to no subsidy (tax credit), premiums went up significantly. The 15% of total consumers who do not receive a tax credit plus nearly 20% of those who do qualify for a tax credit pay significantly more in 2018 than they did in 2017. That number represents over 3.5 million people in the United States. Every one of them are not average.

2 – What Did People Do About It?

Most people purchased a Silver Level Plan and qualified for tax subsidy (which lowers the plan premium), cost share reduction (which lowers the plans copays and deductibles), or both. Those who purchased a Marketpalce plan and did not qualify for a subsidy on average chose a less expensive, lower-benefit Bronze level plan with higher deductibles and copays.

What else did they do?
-Lower percentage of 0-17 year olds (9% in 2018 vs 10% in 2017)
-Lower percentage of 18-34 year olds (26% in 2018 vs 27% in 2017)
-Higher percentage of 55+ (29% in 2018 vs 27% in 2017).
-An additional estimated 7 million people purchase plans off the marketplace (source).

The total insured population divides itself into 3 categories:
1. Those who receive a significant subsidy (8.3 million people)
2. Those who receive no- or low- subsidy (3.5 million people)
3. Those who purchase off-exchange plans (7 million people)

Those who qualify for no- or low- subsidy may consider off-exchange products at a potentially lower rate.

3 – What Will Happen in 2019?

The individual mandate will no longer be in effect in 2019. We expect that premiums changes will continue to particularly impact those who receive no- or low- subsidy. Off-exchange products will increase in popularity with an eventual shift to only 2 categories:
1. Those who receive a significant subsidy;
2. Those who purchase off-exchange plans.

Off-exchange products will offer unique solutions in 2019 that have not been available since before the passage of the Affordable Care Act.

4 – What Can I Do?

“Off the shelf” marketplace plans worked very well for the average person. So first determine if you are average. If you:
-Are 5’ 10” tall,
-Weigh 191 pounds,
-Have brown hair,
-Have brown eyes, and
-Have 1.9 children…

…then as a perfectly average individual, you can expect an off-the shelf marketplace plan to work well for you.

But if you are anyone else, consider working with a qualified professional who knows how to turn an average premium into an above-average plan.

Jonathan Tate
Providing Serious Solutions from Silly Numbers

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