A new report detailing affordability and plan choice in the Health Insurance Marketplace finds that with applicable tax credits, more than 7 in 10 current Marketplace enrollees could find plans for $75 a month in premiums or less, and almost 8 in 10 could find plans for $100 a month in premiums or less.
Consumers who return to the Marketplace to comparison shop could save money. According to today’s report, more than 8 in 10 returning Marketplace consumers could save an average of about $50 per month and $610 annually in premiums before tax credits for the same level of coverage by returning to shop. If all consumers switched from their current plan to the lowest-cost premium plan in the same metal level, the total savings – to consumers and taxpayers (in premiums and tax credits) – would be $4.5 billion. In 2015, about one-third of consumers who reenrolled in a Marketplace plan switched to a new plan.
In addition, nearly 9 out of 10 returning consumers will be able to choose from 3 or more issuers for 2016 coverage. And on average, consumers can choose from plans sold by 5 issuers for 2016 coverage, just as they could for 2015 coverage. Previous research shows that price competition typically intensifies with three or more competitors in a market.
“Open Enrollment starts Sunday, and new and returning customers will find quality health coverage at prices that fit their budgets,” HHS Secretary Sylvia Burwell said. “Nearly eight in 10 Marketplace-eligible uninsured consumers can qualify for tax credits to help make premiums more affordable, and more than seven in 10 returning enrollees could find plans for $75 or less in premiums per month after tax credits.”
Today’s report includes information on affordability and choice for consumers living in the 37 states that used the HealthCare.gov platform in 2015 and 2016.
In 2015, roughly 85 percent of Marketplace consumers received tax credits to make their coverage more affordable. In 2016, a 27 year old with an income of $25,000 a year will on average get an annual tax credit of $1,164 – compared to $972 in 2015. A typical family of four with an income of $60,000 will on average receive an annual tax credit of $5,568 – compared to $4,848 in 2015. Marketplace tax credits are structured so they keep pace with premium increases in the benchmark silver plan, therefore many premium increases are offset (see page 9 of the ASPE analysis for a detailed description of how premium tax credits work).
The number of issuers participating in the Marketplace remained stable in 2016 with an average of 10 issuers per state, up from 9 in 2015 and 8 in 2014.
In 2016, consumers can chose from an average of almost 50 plans in their county. On average, issuers are offering 10 plans each in 2016 compared to 12 plans in 2015. This likely reflects issuers experience in the Marketplace and their understanding of consumer preferences. Enrollment in silver level plans is much higher than other metal level plans—69 percent of enrollees chose a silver plan for 2015 coverage.