Health insurance costs fall for millions of Americans, new report finds

Health insurance costs fall for millions of Americans, new report finds

In an age when higher grocery bills and soaring gas prices take big bites on your paycheck, it can seem like everything suddenly costs more in America.

But at least one item – a critically important item – has seen its cost drop for the third year in a row.

A new report from the Urban Institute has found that the cost of health insurance plans sold in Obamacare markets has fallen every year since premiums increased significantly in 2017 and 2018.

And that trend predates the generous new grants that came into effect in March as part of President Joe Biden’s $ 1.9 trillion COVID relief bill.

Add it all up and it suddenly just got a whole lot easier to ensure affordable health coverage.

Why are Obamacare premiums getting cheaper?

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The Urban Institute found that Affordable Care Act (ACA) premiums declined on average 1.2% from 2018 to 2019, 3.2% from 2019 to 2020, and 1.7% from 2020 to 2021.

These numbers might not be too eye-catching, but some states have seen their rates drop to double digits. And any decrease represents a dramatic reversal from 2017-18, when premiums rose almost 32% nationwide.

Under the Trump administration, the federal government stopped paying insurance companies to reduce some personal expenses of low-income policyholders. Insurers responded to the loss of income by increasing premiums.

Insurers have also increased premiums in response to uncertainty created by Congress’ continued efforts to repeal Obamacare in the spring and summer of 2017, according to the Urban Institute. Fearing enrollments could drop, insurers have raised the cost of premiums in the silver market, the national average benchmark premium of which rose by more than 30% in 2018 alone.

Under the chairmanship of Joe Biden – who as vice president was partly responsible for shaping the ACA – this uncertainty is no longer a concern. A key part of Biden’s healthcare policy is the improvement and expansion of Obamacare.

This stability has led insurers – national and regional insurers, Medicaid insurers, start-up insurers – to rush into the market. Over the past three years, the number of insurers participating in Obamacare markets has grown by 50% and increased competition has helped drive down prices.

The Urban Institute says the state’s policy decisions regarding Obamacare have also helped lower premiums. Reinsurance programs specifically designed to reduce premiums have been rolled out in 12 states, a development which the Institute says “contributed to lower premiums or lower premium increases in 2021 than they would have occurred. produced otherwise “.

New subsidies further reducing costs

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By far the most significant change to Obamacare over the past year is the new introduction of generous new grants, in the form of tax credits, that Americans can apply to health plans purchased on Healthcare.gov. and other markets.

Thanks to the new measures – which the president is seeking to make permanent – ACA coverage costs will be limited to 8.5% of your income at most. Before the new grants, this percentage was 10%.

For low-income policyholders, the new subsidies will completely eliminate your premiums, according to the Department of Health and Human Services (HHS).

And for the first time, those rules now extend to those earning more than 400% of the federal poverty line, which works out to about $ 51,000 for individuals and $ 104,800 for a family of four.

According to HHS estimates, around 9 million Americans could save massive amounts of money in health insurance:

  • $ 1,000 per month on their premiums for an uninsured couple earning over $ 70,000.

  • Reduced premiums of $ 200 per month for a family of four with a family income of $ 90,000.

  • $ 0 in bonuses for someone earning $ 19,000, an average savings of about $ 66 per month.

Get the best price for your health

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If you are currently signed up for a marketplace plan, you will need to act quickly to take advantage of falling prices and increasing subsidies.

HHS suggests reviewing your request on Healthcare.gov and making any necessary changes to your information. Then select a new plan or reselect your old plan to receive the increased premium tax credits.

You have until August 15, the end of the current special enrollment period this year, to make your plan choice – but acting immediately would mean you would see those premiums and costs lower.

If you live in a state that maintains its own marketplace platform, you should visit your state’s site or call its hotline for more information.

Find other ways to save

Obamacare premiums may be going down, but the cost of competing health care plans is actually on the rise.

The Urban Institute says premiums for employer-sponsored plans have increased by around 4% in 2019 and 2020, so if you’re still using an alternative to Obamacare, you might be paying more than you need to.

But if you choose to stick with your employer-sponsored plan, be sure to take advantage of other money-saving strategies to offset the cost:

  • Reduce the cost of home ownership. If you’re a homeowner and haven’t refinanced ultra-low interest rates in the past year, you might be missing out. Mortgage data and technology provider Black Knight says 14.1 million homeowners still have the potential to save an average of $ 287 per month by refinancing. Be sure to check if you can get a better deal on home insurance as well.

  • Dominate your debt. Credit cards and short-term personal loans saved the lives of many Americans during the pandemic, but their high interest rates can wreak havoc on your finances for years to come. Consolidating your balances into a low interest debt consolidation loan will help you pay off your debts faster and at lower cost.

  • Be serious about saving. If your budget is stretched to the point of crumbling, all unnecessary spending should stop. Cancel any monthly subscriptions you don’t use. Resist the urge to splurge once your favorite stores are open. Go to the grocery store with a list and stick to it. And when you shop online, use a free browser add-on that automatically searches for better prices and coupons.

  • Invest, because you can afford it. You don’t have to be rich to get involved in today’s hectic stock market. A very popular application allows you to invest in a diversified portfolio using nothing more than the “spare currency” of your daily purchases.

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About Evelyn C. Heim

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