![]() ![]() But now, premium payments are capped at no more than 8.5% of household income. Under the original ACA subsidy structure, subsidies were unavailable to people with incomes above 400% FPL, meaning premiums for older enrollees could easily cost more than 20% of their household income. The average unsubsidized silver plan premium for a 60-year-old couple in 2023 is more than $1,900 per month in 2023. Now these consumers must contribute no more than 8.5% of their income toward the benchmark silver plan. This change is especially beneficial to older marketplace consumers (50 and older) whose premiums are age-adjusted in most states and can be up to 3 times that of young adult premiums for the same policy. The Inflation Reduction Act, like the ARPA before it, extends eligibility for premium tax credits to reach people with incomes over 400% FPL ($54,360 for a single person in 2023, or $111,000 for family of 4). By reducing premium contributions to $0 (or near $0), the Inflation Reduction Act essentially guarantees access to silver plans with generous cost sharing reductions that substantially reduce deductibles and copays. The subsidy now fully covers the cost of enrolling in the benchmark silver plan for consumers with income up to 150% of the federal poverty level (FPL). With the original ACA subsidy structure, consumers at 150% FPL ($20,385 for a single person in 2023, or $41,625 for a family of 4) had to pay about 4% of household income for the benchmark plan. Just like the ARPA, the enhanced subsidies in the Inflation Reduction Act reduce costs across the board by further lowering payments for people who were already eligible for subsidies under the original ACA subsidy structure and by extending subsidy eligibility to middle-income people by removing the upper income limit on subsidies. Enhanced Marketplace subsidies continue and will reduce net premiums for most consumersĮxpanded and enhanced marketplace premium subsidies, enacted under the American Rescue Plan Act (ARPA), took effect in 2021 and remain in effect for 2022. The recently passed Inflation Reduction Act (IRA) ensures that the ARPA’s subsidies continue without interruption for an additional three years, through 2025. Bronze plan premiums are similarly increasing by about 4% and gold plan premiums are mostly steady at 2%. We estimate the average 40-year-old would pay $456 for a silver benchmark premium in 2023 before accounting for the subsidy (a 4% increase from $438 in 2022). The average unsubsidized silver benchmark premium for a 40-year-old was $481 in 2018, falling to $438 by 2022. In retrospect, insurers may have over-corrected, as many ended up owing large rebates to consumers and a number of insurers lowered premiums in the subsequent years. Back in 2018, insurers responded to the loss of cost-sharing subsidy payments and concerns over enforcement of the individual mandate or repeal of the ACA by raising premiums sharply. Additionally, in our analysis of insurers’ financial performance last year, we found individual market insurer margins fell in 2021 after years of relatively flat margins some insurers may have raised premiums to regain margins of prior years.Īlthough premium changes vary quite a bit from state to state, 2023 will mark the first time in several years when benchmark premiums are increasing on average nationwide. In our earlier analysis of 2023 insurer rate filings, we found that insurers cited rising prices and rebounding utilization as driving the bulk of these premium increases. The vast majority of Marketplace enrollees receive a subsidy and therefore are largely shielded from these increases, though, as we discuss more below, they may need to switch plans to take full advantage of the subsidies. ![]() State average benchmark premium changes range from a drop of -18% in Virginia to an increase of +15% in New Mexico. ![]() ![]() Heading into 2023, we estimate that ACA Marketplace benchmark premiums are increasing an average of 4% across all 50 states and DC (which is similar to government estimates of premium changes in just the states that use ). Unsubsidized premiums will increase more than in past years Even after a decade of operation, there continue to be changes in these markets. This year’s open enrollment season will last from Novemto Januin most states, longer in some state-based marketplaces. The 2023 Affordable Care Act (ACA) Open Enrollment period marks the tenth year of Health Insurance Marketplaces opening their doors to new enrollees. ![]()
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