Average benchmark premiums for plans on the Affordable Care Act’s exchanges have fallen for the third straight year, according to a new analysis.
Researchers at the Urban Institute, a left-leaning think tank, found that the average benchmark premium on the exchanges fell by 1.7% for 2021. That follows decreases of 1.2% in 2019 and 3.2% in 2020.
By contrast, premiums for employer-sponsored plans increased by 4% in both 2019 and 2020, according to the report. Data for 2021 on the employer market are not yet available, the researchers said.
The national average benchmark premium was $443 per month for a 40-year-old nonsmoker, according to the report, before accounting for any tax credits.
The researchers found much significant variation in premium levels between states, though the difference in growth rates was smaller. Minnesota reported the lowest average benchmark premium at $292 per month, and the highest was in Wisconsin at $782 per month.
Average benchmark premiums topped $500 in 10 states, according to the report.
One of the key trends that’s slowing premium growth is increasing competition in the exchanges, as many insurers are expanding their offerings or returning to the marketplaces to offer plans, according to the report.
“New entrants included national and regional insurers, Medicaid insurers, and small start-up insurers,” the researchers wrote.
“Medicaid insurers are those who operated exclusively in the Medicaid managed-care market before 2014; they have increased their participation in the Marketplaces over time. Medicaid insurers are experienced in establishing narrow, low-cost provider networks that allow them to offer lower premiums than other insurers.”
UnitedHealthcare, for example, participated in just four regions included in the study in 2017, but had upped its participation to 11 for 2021. Aetna participated in three regions included in the study in 2017 before fully exiting the exchanges; CVS Health CEO Karen Lynch told investors earlier this year that the insurer plans to return to the marketplaces in 2022.
Several states have also launched programs that aim to lower premiums, according to the report. These include reinsurance programs, which have been rolled out in 12 states as of this year. Some states have also expanded Medicaid in recent years, which leads to some low-income people with costly health needs switching to that program, the researchers said.