Lower premiums, more choices on Obamacare exchanges for 2022 as Democrats battle to extend generous subsidies

By Tami Luhby, CNN

Consumers shopping for health coverage on the federal Affordable Care Act exchanges can likely find lower premiums and more choices for 2022 — as well as generous government assistance, according to a Biden administration report released Monday.

The upcoming open enrollment period, which begins November 1 and runs through January 15, is the first for President Joe Biden, who is seeking to restore the landmark health reform law after the Trump administration spent four years trying to undermine it.

It comes as the Obamacare exchanges are seeing increased interest amid the coronavirus pandemic. An additional 2.8 million people signed up for coverage on the federal and state marketplaces during a 6-month special enrollment period that Biden launched in mid-February.

A record 12.2 million Americans were enrolled in Affordable Care Act policies, as of mid-September.

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However, Biden and congressional Democrats are also trying to make sure that 2022 isn’t the final year the American Rescue Plan’s enhanced premium subsidies will be in place. They had hoped to make the beefed-up assistance permanent as part of their $3.5 trillion social spending plan, but it looks like the extension will be pared back to only a few years as the party seeks to shrink the bill’s price tag to bring moderate Democrats on board.

Lower premiums

The average premium for the benchmark silver plan in 2022 will decline by 3% a month for the 33 states that are participating in the federal exchange, healthcare.gov, according to the report, issued by the Centers for Medicare & Medicaid Services.

This is the fourth year in a row that premiums have dropped, as insurers are better able to price their policies based on enrollees’ health care needs and as the marketplaces become more competitive. The average benchmark plan premium is 10% lower for a 27-year-old and 9% lower for a family of four than in 2018, before subsidies, for example.

“While inflation seems to be increasing prices for a lot of the products that we need and use, the good news is when it comes to health care at the Affordable Care Act exchanges, there’s a good chance you’ll see a drop in the price of your premiums,” Health and Human Services Secretary Xavier Becerra told CNN.

But even fewer people will pay the sticker price for 2022 coverage thanks to the enhanced premium subsidies. The average lowest-priced plan for federal exchange enrollees will cost $41 a month after assistance, compared to $441 without subsidies. Many lower-income enrollees can pick policies with no monthly premium or ones costing just a few dollars.

Four out of five consumers will be able to find coverage for $10 or less, after enhanced subsides, according to the agency.

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The Democrats’ $1.9 trillion coronavirus relief plan, which Biden signed in March, made two changes to the subsidies to address long-standing complaints that Obamacare plans are not affordable for many people, particularly the middle class.

Enrollees pay no more than 8.5% of their income toward coverage, down from nearly 10%. And lower-income policyholders receive subsidies that eliminate their premiums.

Also, those earning more than 400% of the federal poverty level — about $51,000 for an individual and $104,800 for a family of four in 2021 — are now eligible for help for the first time.

The subsidy enhancement, which the Biden administration is heavily touting in hopes of further boosting enrollment, is in effect for this year and next, unless Congress acts.

About 12 million people selected policies or were automatically re-enrolled in coverage during last year’s open enrollment period for 2021, the first time sign ups increased during the Trump administration.

Shop around

Still, even with the enhanced subsidies, it’s important for people to actively shop for 2022 coverage, rather than let themselves be rolled over into the same plan, said Cynthia Cox, director for the Program on the ACA at the Kaiser Family Foundation.

With so many new insurers offering plans, it’s possible that less expensive options are available.

Also, subsidies are tied in part to the premium for the benchmark plan in one’s area, which could change every year. If the premium for the 2022 benchmark plan declines, then the subsidy amount could too. Those in more expensive policies could wind up paying even more each month.

“The subsidies can shelter most enrollees from paying any premium increase, but that depends on the enrollee being willing to switch plans,” Cox said. “If they are not willing to switch plans or if they just passively re-enroll, then they could be on the hook for a premium increase. It’s important to know what you are getting into.”

More choices

Some 213 issuers will participate in the federal exchange in 2022, 32 more than this year. Enrollees will have access to between six and seven issuers and more than 107 plans, on average. Both are greater than previous years.

The Centers for Medicare and Medicaid Services is also pouring more money into helping people sign up for coverage — an effort that was drastically scaled back under the Trump administration.

Some 60 navigator organizations received $80 million in grants for the 2022 plan year. Almost $11.5 million in additional funding is available to these groups to support additional outreach, education and enrollment activities during the expanded sign up period for the federal exchange. The sign up season ended on December 15 under the Trump administration.

“We have also quadrupled the number of navigators available to guide consumers through the sign-up process, and lengthened the open enrollment period,” Becerra said.

The agency is also conducting a national broadcast advertising campaign, along with targeted digital efforts. It is working with cultural marketing experts to reach communities with less access to health care, including African Americans and Latinos.

“We’re going to make sure that we get the word out,” he said, noting that the agency has really beefed up the advertising budget. “We are also targeting communities that have often been left out, that don’t get reached.”

Three states create their own exchanges

Three states — Kentucky, Maine and New Mexico — launched their own exchanges for 2022. Doing so gives them more control over negotiating with insurers on cost, as well as running and marketing their open enrollment periods.

Maine, for instance, is providing $350,000 for a statewide consumer help line and training and technical assistance for 2022, up from $200,000 this year.

The switch to a state-based marketplace will also save residents money since they will no longer have to pay a surcharge on premiums levied by the federal exchange. In Kentucky, for example, enrollees are expected to save at least $15 million a year.

This story has been updated with additional comment.

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