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In Health Insurance Wastelands, Rosier Options Crop Up For 2019

| November 25, 2018

health care premiums 2019

(Caitlin Hillyard/KHN illustration; Getty Images)

In recent years, places such as Memphis and Phoenix had withered into health insurance wastelands as insurers fled and premiums skyrocketed in the insurance marketplaces set up by the Affordable Care Act. But today, as in many parts of the country, these two cities are experiencing something unprecedented: Premiums are sinking and choices are sprouting.

In the newly competitive market in Memphis, the cheapest midlevel “silver” plan for next year will cost $498 a month for a 40-year-old, a 17 percent decrease. Four insurers are selling policies in Phoenix, which then-presidential candidate Donald Trump highlighted in 2016 as proof of “the madness of Obamacare” as all but one insurer left the region.

Janice Johnson, a 63-year-old retiree in Arizona’s Maricopa County, which includes Phoenix, said her premium for a high-deductible bronze plan will be $207 instead of $270 because she is switching carriers.

“When you’re on a fixed income, that makes a difference,” said Johnson, who receives a government subsidy to help cover her premium. “I’ll know more than a year from now if I’m going to stick with this company, but I’m going to give them a chance, and I’m pretty excited by that.”

Across all 50 states, premiums for the average “benchmark” silver plan, which the government uses to set subsidies, are dropping nearly 1 percent. And more than half of the counties that use the federal exchange are experiencing an average 10 percent price decrease for their cheapest plan.

In most places, the declines are not enough to erase the price hikes that have accrued since the creation in 2014 of the health care exchanges for people who don’t get insurance through an employer or the government.

Instead, experts said, next year’s price cuts help to correct the huge increases that jittery insurers set for 2018 plans to protect themselves from anticipated Republican assaults on the markets. Although Congress came up one vote shy of repealing the law, Trump and Republicans in Congress did strip away structural underpinnings that pushed customers to buy plans and helped insurers pay for some of their low-income customers’ copayments and deductibles. Insurers responded with 32 percent average increases.

“Insurers overshot last year,” said Chris Sloan, a director at Avalere, a health care consulting company in Washington, D.C. “We are nowhere close to erasing that increase. This is still a really expensive market with poor benefits when it comes to deductibles and cost.”

For 2019, the average benchmark silver premium will be 75 percent higher than it was in 2014, according to data from the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)

When Republicans failed to kill the health law last year, they inadvertently may have made it stronger. Insurers banked hefty profits this year, and new companies are moving in.

All these factors were especially influential in Tennessee, where the average benchmark premium is dropping 26 percent, according to a government analysis. That is more than in any other state.

In 2018, 78 of 95 Tennessee counties had just one insurer. That monopoly allowed the insurer to set the prices of its plans without fear of competition, said David Anderson, a researcher at the Duke-Margolis Center for Health Policy in Durham, N.C. “They were massively overpriced,” he said.

But for the coming year, 49 Tennessee counties will have more than one insurer, with a few — like Shelby County, where Memphis is located — having four companies competing. There, Cigna dropped the price of its lowest-cost silver plan by 15 percent. Nonetheless, it was underbid by Ambetter of Tennessee, which is owned by the managed-care insurer Centene Corp.

“We’re finally at the point where the market is stabilized,” said Bobby Huffaker, the CEO of American Exchange, an insurance brokerage firm based in Tennessee. “From the beginning, every underwriter, and the people who were the architects, they knew it would take several years for the market to mature.”

Still, the cheapest Memphis silver premium is nearly three times what it was in 2014, the first year of the marketplaces. A family of four with 40-year-old parents will be paying $19,119 for all of next year unless they qualify for a government subsidy.

“The unsubsidized are leaving,” said Sabrina Corlette, a professor at Georgetown University’s Health Policy Institute. “They are finding these premiums unaffordable.”

The landscape in Phoenix is greatly improved from when Trump visited after the federal government announced a 116 percent premium increase for 2017, as the number of insurers dropped from eight to one.

But now, three new insurers are entering Maricopa County. Ambetter, the only insurer this year, dropped its lowest price for a silver plan for next year by 12 percent and still offers the cheapest such plan.

Ambetter’s plan is still 114 percent above the least expensive silver plan in the first year of the exchanges. And none of the insurers are offering as broad and flexible a choice of doctors and hospitals as consumers had back then, said Michael Malasnik, a local broker.

Since the start of the exchanges, he said, insurers have “raised their rates by multiples, and they’ve figured out you have to be a very narrow network.”

Each plan for 2019 contains trade-offs. He said only Bright Health’s plan includes Phoenix Children’s Hospital. Ambetter’s plan includes the most popular hospital and doctor groups, but they are not as conveniently located for people living in the southeastern corner of the county, making other insurers’ plans appealing.

“Geography is the name of the game this year,” Malasnik said.

Theresa Flood, a preschool teacher who lives outside Phoenix, said none of the plans she considered accepted her doctors, who include a specialist for her spine problems — she has had four surgeries — and a neurologist who monitors a cyst and benign tumor in her brain.

“I have to establish care with a whole new spine doctor and establish care with a whole new neurologist if I want to follow up on these things,” Flood, 59, said. “You’re going from established care to who in the heck am I going to see?”

The plan she chose would have been too expensive except that she and her husband, John, a pastor, qualified for a $1,263-a-month subsidy that will drop the cost to $207 a month. That bronze plan from Ambetter carries a $6,550-per-person deductible, so she expects she’ll still have to pay for her doctors on her own unless she needs extensive medical attention.

“It’s gone from being able to have a plan that you could sort of afford and got some benefit from, to putting up with what you can afford and hoping nothing happens that you actually have to use your insurance,” she said. “At this point, I’ll take what I can get.”

–Jordan Rau, Kaiser Health News

6 Responses for “In Health Insurance Wastelands, Rosier Options Crop Up For 2019”

  1. Kamamani says:

    Are you kidding me? You are bragging about a 15% price cut on extremely overpriced plans that don’t pay diddly squat until you reach a premium that very few average americans can afford?! We will all still be paying several undred dollars a month that we can’t afford for crappy coverage that won’t help one iota to get us better health care, or even basic health care! The Affordable Care Act is still a crock that costs working class Americans more than they can afford and gives us nothing in return!! Stick to reporting local news and keep the crappy editorials to yourself.

  2. Pogo says:

    @The more you know

    Are Health Insurance Premiums Going Up or Down for 2019?

    Cutting through the noise about health insurance premium changes

    By Louise Norris Updated October 16, 2018

    Article Table of Contents

    Rate Changes for the Individual Market

    Overall vs. Benchmark Premiums

    What This Means for 2019 Premiums

    Factors Causing Rates to Be Higher

    Factors Causing Rates to Decline

    Numerous Other Factors

    “If you’ve been paying attention to headlines about health insurance this year, you’ve probably seen plenty about premiums going up as a result of various legislative and executive actions. But you’re also probably seeing others highlighting the fact that premiums are going down for 2019. So, what’s really going on?

    As it turns out, both sets of the headlines are true—in some areas, premiums are going down for a variety of reasons. But in most areas, premiums are also going to be higher than they might otherwise have been without various government decisions. Let’s sort through all the noise and figure out what’s really happening to your health insurance premiums…”

    I use the text-to-speech feature built into Firefox to “listen” to Flagler Live. If you’re not familiar with it you can Google “how to use reader view in firefox” (or any other browser by substituting the appropriate name) and a quick and clear explanation will be provided. I believe complex topics with many intricacies may often benefit from this. Your mileage may vary from mine. Good day.

  3. Stretchem says:

    Everything about the initial ACA plan played into the Repubican montre of capitolism and free market enterprise, but since it wasn’t a Republican idea I suppose, every attempt imaginable has been made to dismantle and sabotage it.

    The power of the people will always prevail sooner or later. The repeal and replace morons only delayed the inevitable and cost lives in the interim.

  4. Concerned Citizen says:

    Ever since this Obama Care mandated nonsense I have gone without insurance. I make OK money but with Rent, Utilities, Car Insurance, Gas, and Groceries there is absolutely no room left over for a 400 dollar a month premium. Whoever designed this obviously doesn’t live paycheck to paycheck.

    We now have a health care plan that makes it easier to eat the fine at tax time. It’s far cheaper than paying 200 to 400 a month in “mandated insurance”

  5. Richard says:

    The cost for healthcare goes up for people who don’t qualify for any subsidy just to pay for the people who do qualify for a subsidy. More fake news in an attempt to shore up a crumbling healthcare program that is failing everyone except for the poor and people on Medicare and/or Medicaid.

  6. gmath55 says:

    Back in the day when I was working we had BC/BS of Michigan. Had it all. Medical, Dental, Optical, Prescriptions and only paid 10% of whatever procedure was done. What changed? Greed!

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