Broader Inflation May Be Up, But Obamacare Premiums Are Down – Forbes
U.S. President Joe Biden and former U.S. President Barack Obama, left, embrace during an event on … [+]
© 2022 Bloomberg Finance LP
While much attention focused on consumer prices rising 8.5 percent through March, the cost of individual coverage under the Affordable Care Act is dropping for the third consecutive year, a new report shows.
Health insurance premiums in the Affordable Care Act marketplace, also known as Obamacare, “declined in most states in 2022 for the third straight year,” according to a new report Tuesday from the Urban Institute. Premiums for benchmark plans dropped 1.8% nationally for the 2022 coverage year.
“Three years of declining benchmark premiums combined with the American Rescue Plan provisions has been a win for Marketplace consumers, as evidenced by record enrollment,” said Kathy Hempstead, senior program officer at the Robert Wood Johnson Foundation, which funds the Urban Institute.
The news comes with record enrollment in individual coverage under the ACA to nearly 14 million this year. Analysts attribute the record sign-up to the stability to premiums to moves thanks to the Biden administration as well as the American Rescue Plan Act passed into law last year that increased and expanded subsidies temporarily for 2021 and 2022 for low- and middle-income individuals and families to purchase health coverage.
“Overall, we saw reductions in Marketplace premiums in 2022 in many states and localities,” Urban Institute fellow John Holahan said. “Several new factors affected insurers as they set premiums for 2022, including increased insurer competition and generous subsidies from the American Rescue Plan Act that increased the likelihood that healthy people would choose to buy coverage previously deemed unaffordable.”
But it’s not all good in the health insurance space given costs of employer coverage continue to rise. The Urban Institute report said the good news on Obamacare contrasts with premium increases in employer-sponsored plans of 3.6% in 2021 and 3.9% in 2020.
