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Still Cherry-Picking Premiums


Donald Trump claimed that a 25 percent average increase in premiums on the HealthCare.gov exchanges, announced by the Obama administration, was a “phony number,” citing instead increases of “60, 70, 80 percent.” But Trump just as easily could have cherry-picked increases in the single digits.

The fact is, the administration’s report shows wide variation for the change in premiums. That variation ranges from a 116 percent average increase for the second lowest-cost silver “benchmark” plan for a 27-year-old in Arizona to a 3 percent average decrease for those plans in Indiana. There’s a mere 2 percent average increase in the swing state of Ohio, but a 53 percent average hike in neighboring Pennsylvania.

It all adds up to an average 25 percent increase across the 38 states on HealthCare.gov from 2016 to 2017. The median increase is 16 percent. That’s without factoring in government subsidies.

But in an appearance at Trump National Doral Golf Club in Miami, Trump wasn’t buying it. He cited high increases for some plans and called the 25 percent average “so wrong.” (See the video provided by the New York Times.)

Trump, Oct. 25: Even the White House, our president announced that 25 or 26 percent. That number is so wrong. That is such a phony number. You’re talking about 60, 70, 80 percent in increases not 25 percent. And I think what he wanted to do because it was blowing up all over the country. The numbers came out in Texas where it’s 60 percent increases and other places, other states, one state’s going to be 92 percent, I understand. So I think they wanted to put out, pretty sad when you put out a 25 or 26 percent increase and that’s supposed be to keep it down.

That same day in Tallahassee, Trump told the crowd: “They gave a number of 25 percent average. They know that’s not true. They wanted to try and get out of, you know — get in front — they know that’s not true. It’s much more. You’re going to have 60, 70, 80, 90 percent increases in Obamacare.”

But in Florida, where Trump was speaking, the average increase was 14 percent.

(Trump also claimed in Doral, speaking in front of a group of his employees: “All of my employees are having a tremendous problem with Obamacare.” But he changed that talking point in Tallahassee, saying: “I’m proud of the fact that I employ thousands and thousands of people all over Florida. … But I’m also proud to provide them with benefits, including health care. Unfortunately, a small number of the people that work at Trump National in Doral, which is Miami, they’re on Obamacare, a small percentage. And as I said this morning, they are having tremendous difficulty.”)

Trump has highlighted high premium increases for plans sold on the Affordable Care Act exchanges before, and it’s true that some plans are expected to go up considerably. And as the Oct. 24 report released by the Department of Health and Human Services shows, there are three states with average increases for benchmark plans above 60 percent. More states likely have individual insurance plans that go up that high, even though the average increase across all benchmark plans is much lower.

For instance, the HHS report shows the average increase for the benchmark plan for a 27-year-old in Texas is 18 percent (see Table 6 for the state-by-state figures). But there’s wide variation within the state. In Dallas County, the average increase is only 7 percent, from an average $216 month premium to $232, but in Medina County, which includes San Antonio, the jump is nearly a doubling, from an average $201 to $399 per month (see Table 13).

Such a wide spread in the numbers makes the report ripe for cherry-picking, and no surprise that the average falls somewhere in between the extremes. There’s also plenty of fodder for critics of the law, without resorting to claiming the average is “phony” or “not true.”

In fact, the 25 percent average increase among HealthCare.gov states is substantially higher than the 7.2 percent increase from 2015 to 2016, reported by HHS last year.

premium_chart

As it has in the past, the department’s latest report measures the change in premiums for what are called “benchmark” plans, or the second-lowest cost silver plans, which are used to calculate advance premium tax credits. The report says 84 percent of the 10.4 million Americans with marketplace coverage in the first half of 2016 received tax credits, and 56 percent also received cost-sharing reductions, according to the Centers for Medicare & Medicaid Services. The tax credits shelter consumers from premium increases, because they put a cap on the amount an individual must contribute toward benchmark premiums based on income.

The HHS report notes that 77 percent of current enrollees can find plans for $100 or less, after factoring in tax credits. But, of course, about 1.7 million of the enrollees don’t get tax credits, and more Americans buy individual coverage through brokers or otherwise outside the exchanges. Drew Altman, president and CEO of the nonpartisan Kaiser Family Foundation, put the number buying their own insurance outside the exchanges at an estimated 7 million in a blog post for the Wall Street Journal on Oct. 26.

The HHS report looked at the 39 states that use HealthCare.gov for their marketplace plans — though Kentucky is new to that federal system, so it’s not included in a comparison from year to year. HHS also had information on four state-based marketplaces plus the District of Columbia’s. Including those figures brings the average increase for the second lowest-cost silver plan down to 22 percent.

Why the higher average increase for 2017 plans compared with 2016? Experts have said plans were priced lower than expected when the exchanges launched in 2014. And some insurers have had to adjust their rates over the past few years because not enough healthy people have signed up for insurance to offset the costs of those with medical conditions. Also, some insurers, such as UnitedHealthcare and Aetna, pulled out of the marketplaces in some states or counties, citing financial losses.

A Kaiser Family Foundation analysis of ACA marketplace data shows that 57 percent of those enrolled in exchange plans will have a choice of plans from three or more insurers in 2017. The figure was 85 percent of those enrolled in 2016. That means there’s less competition.

The HHS report is measuring the change in the second lowest-cost silver plans, but that may not be the same plan in each county from 2016 to 2017. As we found in the past, it can pay to shop around and switch plans, which is what nearly 43 percent of those who reenrolled in HealthCare.gov plans in 2016 did. For 2017, HHS says three-fourths of enrollees could save money on their premiums by switching to the lowest cost plan in each level of coverage offered — bronze, silver, gold and platinum.

In April, HHS released a report on the actual experience of HealthCare.gov enrollees, saying that the average increase in premiums experienced by consumers was 8 percent from 2015 to 2016, and among those receiving tax credits, the increase they actually paid was 4 percent, or $4 per month.

The wide variation in premium changes among states, and different individual circumstances for those buying their own coverage under the Affordable Care Act, shows that a nationwide average increase doesn’t tell the whole story. But that doesn’t mean the number is “phony.”

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