Consumers who purchased a silver-level plan in the Health Insurance Marketplace paid, on average, $69 a month after tax credits according to a report issued yesterday by the Department of Health and Human Services (HHS). Plans in the silver tier, the second least expensive of the four plan levels, are the most popular choice among consumers. The report is an analysis of premium costs and competition in the Federally-Facilitated Marketplaces (FFM) and State-based marketplaces during the first enrollment period, which ran from Oct. 1, 2013 through the end of this March.
Nearly 5.5 million purchased health plans through the FFM, and another 2.5 million bought plans through their state’s health insurance exchange during the first open enrollment period. Of those who enrolled through the federal marketplace, 87 percent selected plans with a tax credit. Tax credits are available to individuals with household incomes between 100 and 400 percent of the Federal Poverty Level.
Average premium costs vary by state. In the FFM, the average monthly premiums in Mississippi across all tiers were the least expensive, coming in at $23, after apply tax credits. New Jersey was the most expensive at $148 per month.
“Nearly 7 in 10 consumers who signed up for Marketplace coverage are paying $100 or less for that coverage. When there is choice and competition, everybody benefits.” — Secretary Sylvia Burwell, Health and Human Services
Competition, the report finds, has helped to drive down premium costs. On average, consumers across the nation could choose from 42 different plans offered by at least five insurers. HHS data shows a 4-percent decrease in premium costs is associated with each additional insurer in a geographic rating area. Nearly 26 percent of issuers offering plans during the initial enrollment period are new to the market. Reports from state insurance departments indicate that the number of issuers is expected to increase for the next open enrollment period, which begins Nov. 15 and will continue through Feb. 15, 2015.
HHS also credits the Affordable Care Act’s rate review grants with helping to keep costs down. Nearly $223 million has been awarded by HHS to states to bolster their rate review programs. According to HHS figures, enhanced rate reviews have reduced premiums by $1.2 billion from the rates originally requested by insurance companies.