Trump’s Cherry-Picked ACA Rates

Republican front-runner Donald Trump has repeatedly claimed, for months, that premiums under the Affordable Care Act are “going up 35, 45, 55 percent.” Trump cherry-picks insurers’ rate increases on the ACA marketplaces. The average premium increase was 8 percent for HealthCare.gov consumers between 2015 and 2016.

That figure, from the Department of Health and Human Services’ April analysis, reflects the fact that 43 percent of returning customers shopped around, choosing a different plan for 2016. A Kaiser Family Foundation analysis estimated that if those with the lowest cost silver plan in 2015 stuck with the same plans — even though in many cases a different plan in 2016 was now the lowest cost — their premiums would have gone up 15 percent on average. That’s still much lower than the figures Trump cites.

Tax credits for those earning between 100 percent and 400 percent of the federal poverty level bring the actual premiums paid down. HHS reports that 85 percent of those buying a plan on the HealthCare.gov marketplaces in 2016 qualified for tax credits and saw a jump in premiums of 4 percent or $ 4 per month on average.

There was wide variation in premium changes for the ACA marketplace plans in 2016. Trump uses figures from increases on the high-end of the spectrum, but he could just as easily cherry-pick some of the large decreases in certain plan premiums — decreases of 10 percent, or more than 20 percent.

For instance, insurance plans in Washington state had approved rate increases for 2016 that ranged from a drop of 22 percent to an increase of 30 percent. In Indiana, one insurer’s plan lowered premiums by 18 percent, while another raised a plan’s premium by nearly 14 percent. The rate requests and approvals for insurer plans in state and federal marketplaces are available on the HealthCare.gov website.

A Months-Old Claim

We checked this claim from Trump way back in June 2015, when he made it during his speech announcing that he was running for president. Then, Trump said that “costs are going for people up 29, 39, 49 and even 55 percent.”

He used similar figures again in late October on ABC’s “This Week,” and recently made the claim in an April 19 speech after winning the New York primary (at the 2:48 mark).

Trump, April 19: We’re getting rid of Obamacare. It’s going to be repealed and replaced. It is a total disaster with premiums going up 35, 45, 55 percent. It’s going to probably end of its own volition. We’re getting rid of it.

When Trump made the claim originally in June, we wrote that he was talking about proposed rate increases for some plans on the ACA marketplaces, where individuals purchase their own insurance. (The same plans also could be purchased individually through insurance brokers, rather than going through the marketplace websites.) We noted that it was unclear whether the large increases Trump cited would be approved by state insurance regulators, and there were other proposed decreases or single-digit increases in plans that didn’t have to be submitted for review. The Affordable Care Act requires insurers to submit any proposed premium increase above 10 percent to state and federal regulators for review, with an explanation of why the increases are necessary.

As we also noted, most of the insured get their coverage through their employer, and employer-sponsored premiums have been rising at historically low rates for the past few years. Premiums for both single and family employer-sponsored plans increased by 4 percent on average from 2014 to 2015, “continuing a decade-long period of moderate growth,” according to the latest annual Kaiser Family Foundation/Health Research & Educational Trust employer survey. About 6 percent of the U.S. population buys coverage on the individual market.

Final rate increases for the state and federal exchanges for 2016 are now available. And there are still some individual plans with 2016 premium rate increases as high as the numbers Trump cites. But there are also some plans with sizable premium decreases, and more with a mix of decreases and increases in between.

For instance, a New Mexico Health Connections individual plan had an approved increase of 37.6 percent, while another plan in the state, from CHRISTUS Health Plan, had an approved decrease of 4.68 percent. Several Blue Cross Blue Shield rates in Minnesota went up by about 50 percent, while an individual plan from the insurer Gundersen went up by 8.63 percent.

Some people with a marketplace plan may well have paid sizable increases if they stayed with certain plans, but Trump’s implication that these types of increases were widespread or typical is incorrect.

“I would not say the typical experience was, say, a 30 or 40 or 50 percent increase,” Cynthia Cox, associate director for the Program for the Study of Health Reform and Private Insurance at the nonprofit Kaiser Family Foundation, told us.

Cox and her colleagues analyzed the premium rates in 36 states, and 2,365 counties, for a single 40-year-old for the lowest cost silver plans. (The ACA marketplace plans have different levels of benefit coverage — bronze, silver, gold and platinum.) KFF found that “consumers enrolled in the lowest cost silver plan in 2015 would see an average premium increase of 15% if they automatically enroll (or chose to stay) in the same plan in 2016, before any tax credit.”

But it pays to shop around, as the KFF analysis, published in November, made clear. In 73 percent of those counties, the lowest cost silver plan from 2015 was no longer the lowest cost silver plan for 2016. The lowest cost option went up 7 percent in 2016, so consumers could save money by switching plans.

And that’s what 43 percent (2.4 million people) of those returning to the HealthCare.gov marketplaces in 2016 did, according to an HHS analysis released April 12. “Compared to what they would have paid to remain in their 2015 plan, consumers that switched plans saved an average of $ 42 per month in premium costs, equivalent to over $ 500 in annual savings,” HHS said.

Factoring in this comparative shopping, the average premium increase was 8 percent, before taking into account tax credits, the analysis said. The HHS report covers the 9.6 million individuals who enrolled or were automatically reenrolled in plans in the 38 states using the HealthCare.gov site. All told, 12.7 million enrolled or reenrolled in marketplace plans in 2016 in all states.

The KFF analysis, titled “Potential Savings from Actively Shopping for Marketplace Coverage in 2016,” included an example of how some marketplace policyholders could save money by switching health plans.

KFF, Nov. 18, 2015: As an example, the lowest cost silver plan in Dallas, TX was offered by Blue Cross and Blue Shield of Texas at $ 279 per month for an unsubsidized 40 year old in 2015. If the person in Dallas continued in his plan, he would have to pay $ 353 per month in 2016, or an increase of 27%. If he was willing to switch to the new lowest cost silver plan in 2016 offered by Molina, he would pay $ 260 per month, a decrease of 7% compared to what he paid in 2015.

Tax credits lower the premiums paid by most of those on marketplace plans. HHS said that 85 percent of HealthCare.gov consumers qualified for tax credits, and their average monthly net premium increase, taking the credits into account, was 4 percent (or $ 4 per month) from 2015 to 2016. The average premium for those receiving tax credits was $ 106 per month.

Wide Variation in Premium Changes

As we’ve noted, the premium changes for marketplace plans in 2016 varied widely — from double-digit increases to double-digit decreases and everything in between. An earlier KFF analysis on the second lowest cost silver plan premiums in major cities in every state found they ranged from a decrease of 10.6 percent in Seattle, Washington, to an increase of 38.4 percent in Nashville, Tennessee. The average premium change was an increase of 10.1 percent.

(These figures don’t include tax credits. A 40-year-old earning $ 30,000 a year would face an average premium decrease of 0.2 percent for the second lowest cost silver plan, once the credits are included, KFF found.)

An Urban Institute analysis of the lowest-cost silver plan premiums in 20 states and Washington, D.C., found a 4.3 percent average increase, but similar wide variation: The average premium dropped in six states and Washington, D.C., increased by up to 10 percent in 10 states, and increased by more than that in four states.

There are different ways to look at how premiums changed. The Commonwealth Fund measured the changes for all plans and the second lowest cost silver plans (or benchmark plans, used to determine tax subsidies), and weighted the premiums to reflect population, and found an average increase of 6 percent from 2015 to 2016. But, again, there was a variation — “ranging from premium increases of 37 percent in Tennessee to reductions of 8 percent in Texas,” and slower growth of premiums in higher-cost urban areas than suburban or rural areas.

Why the disparity, and overall larger increases for 2016? Cox told us that insurers may have priced too low initially, and are now reacting to having a full year’s experience with actual marketplace activity. The ACA marketplace plans were first available for coverage starting in January 2014, but insurers then submitted 2015 rates before that year was up.

Premiums for 2014 came in lower than the nonpartisan Congressional Budget Office has projected, Cox noted, and 2015 premium changes varied in some areas but were relatively flat on average (the second lowest-cost silver plan went up 2 percent on average across all U.S. counties in 2015). But 2016 was the “first year that insurers could actually use the data that they had gathered from the enrollees that had been in their plans” for a full year, Cox said. And people were “using more health care than the insurers had initially anticipated.” Premiums, therefore, increased more substantially.

The Urban Institute report made a similar observation. “With consumers having full transparency of plan options and premiums and seeking to pay no more than necessary, beginning in 2014, insurers had strong incentives to price aggressively. This is despite the fact that in the initial years they had limited information on the health care needs of those who would enroll. Insurers that choose to price high because of fear of high utilization risk losing market share; consequently, some appeared to have erred on the side of lower-than-necessary premiums and are now correcting for that as the health care profiles of their enrollees becomes clearer.” The authors wrote that it could take a few more years for insurers’ costs, and premiums, to stabilize.

As was the case before the ACA was passed, it’s difficult to make generalizations about consumers’ experience buying their own health insurance. There’s a lot of churn in the individual market, as some use it temporarily while between jobs. And under the ACA, premiums can vary based on geographic location, age and whether an individual smokes. There’s also more freedom to switch plans, as consumers can’t be denied or charged more due to preexisting conditions.

“Premiums have been somewhat volatile from year to year,” Cox said, and the changes depend on where people live, as well as whether they shopped around or received a tax subsidy. “It’s hard to characterize how everyone is being affected by these premiums.”

But everyone is certainly not paying rate increases of “35, 45, 55 percent” — the figures cited by Trump. Some would have paid lower premiums by switching plans — or even sticking with the same plans in some cases — and average premium increases, according to several studies, range from 4.3 percent to 15 percent, not including tax credits.

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