Premiums for plans are lower for third consecutive year

Oct. 20, 2020

The Centers for Medicare & Medicaid Services (CMS) released a report showing the trend of lower premiums and increased issuer participation for will continue for 2021 year. 

The average premium for the second lowest cost silver plan (also called the benchmark plan) dropped by two percent for the 2021 coverage year and, when looking at states that are using in both 2020 and 2021, 22 more issuers will offer coverage in 2021, for a total of 181 issuers delivering more choice and competition for consumers. 

The report shows the third consecutive year of improving market conditions, with three years of declining average benchmark plan premiums combine to deliver an eight percent premium reduction across since the 2018 coverage year. 

Looking at the coming year, four states will see double-digit decreases in the average benchmark plan premiums for 27-year-olds, including Iowa, Maine, New Hampshire and Wyoming. For two of these states - Maine and New Hampshire - CMS has used its authority to approve State Innovation Waivers under Section 1332 of the Patient Protection and Affordable Care Act to establish state-based reinsurance programs, contributing to the decline in premiums. 

Issuer participation will also increase for the third year in row, which represents a dramatic increase in choice for consumers.  As more issuers  offer coverage, the percentage of enrollees with access to only one issuer is decreasing from 29 percent in 2018 to four percent in 2021, and more than three quarters of enrollees will have access to at least three issuers in 2021.  

To show this improvement from a geographic perspective, CMS also released the 2021 Issuer Participation County Map for states with Exchanges that use as well as State-based Exchanges showing greater consumer choice. The map covers the entire country and shows the portion of counties with only a single issuer dropped from 50 percent in 2018 to 24 percent in 2020 and will drop further to nine percent in 2021.  For 2021, there will be 288 counties nationwide with a single issuer offering plans through the Exchange, down over 80percent from a high of 1,582 counties with a single health insurance issuer offering plans through the Exchange in 2018.  

While the report shows efforts to stabilize the market are working, average premiums are still significantly higher than when the Affordable Care Act (ACA) was first implemented and affordability remains a significant challenge for people who do not qualify for a premium tax credit and must pay the entire premium themselves.   

The average benchmark plan premium for a typical family of four has increased from $794 in 2014 - the first year the ACA’s main requirements were introduced - to $1,486 in 2021. As premiums increase, a recent report by CMS on enrollment among people with and without subsidies documents how unsubsidized enrollment continues to decline, suggesting middle income Americans continue to struggle to afford coverage. 

Consumers will be able to start enrolling in plans for the 2021 plan year beginning on November 1, 2020, which marks the beginning of the annual Open Enrollment Period for the individual market Exchanges. The Health Insurance Exchange 2021 Open Enrollment Period is Nov. 1, 2020 to Dec. 15, 2020, with coverage beginning on Jan. 1, 2021. 

Ahead of the Open Enrollment Period, CMS is also releasing the scheduled maintenance windows for the upcoming Open Enrollment Period. Every year, CMS establishes scheduled maintenance windows that provide periods of time when CMS and its partners can make updates or resolve issues, if needed. Consumer access to may be limited or restricted when this maintenance is required. 

The purpose in scheduling these times is to minimize any consumer disruption. Regularly scheduled maintenance will continue to be planned for the lowest-traffic time periods on, which are Sunday mornings. Maintenance will only occur within these windows when deemed necessary to provide consumers with a better shopping experience. While maintenance time during Open Enrollment can vary from year to year due to various factors, last year was available 96.9 percent of the time. This year’s scheduled maintenance windows are similar to previous years. 

CMS has the release