Amy Coney Barrett heads to the U.S. Supreme Court with the power to put the final nail in Obamacare’s coffin. But her ascendance comes just as consumers and taxpayers are getting good news about Obamacare.
When Americans go shopping for health insurance on HealthCare.gov this open enrollment—which runs from November 1 through December 15—many will find cheaper options than last year, and more of them.
For the third year in a row, Obamacare premiums have gone down, according to a recent announcement by CMS.
In the 36 states that use HealthCare.gov for their health insurance Marketplace, average premiums for an individual 27-year old decreased 2% for the benchmark plan, qualifying plans on which subsidies are based. In four states, average premiums decreased 10% or more between 2020 and 2021; only residents of North Dakota will face a 10% increase in average premiums.
“The lower average premiums in 2021 is good news overall,” said Mark Shepard assistant professor of public policy at Harvard Kennedy School of Government.
“But counterintuitively, it’s mostly good news for federal spending, not for most households buying insurance on the exchanges.”
For lower-income people, premiums serve as a reference point to determine their subsidy amount. Subsidies are calculated based on the difference between what the government determines people should be able to afford and the price of the average benchmark plan.
“Lower-income households are shielded from both premium increases and decreases,” said Shepard. “They aren’t hurt much when premiums go up and aren’t helped much when they decline.”
As a result, Shepard expects only modest enrollment changes for lower-income enrollees.
On the other hand, there could be more of a positive impact on enrollments among higher-income people who do not qualify for subsidies. People in this group have historically felt the pain of paying the full premiumthemselves.
There is another bright spot in the CMS announcement: more consumer choice.
For the 2021 plan year, 181 health insurers will offer Qualified Health Plans, 22 more than were available for 2020 coverage.
This expansion of choice—a continuing trend since a low in 2018—is one of the best pieces of news, according to Shepard.
“Particularly important is the decrease in places with only one insurance competitor,” he said. “Single-competitor areas are particularly vulnerable to high premiums and other problems with insurance market power.”
Consumers typically lose when there is only one insurer available. Higher rates, restricted choices, and less consumer-friendly policies can go unchecked. Even where dominant insurers use their market power to negotiate down hospital and other healthcare provider rates, there is little evidence that insurers pass those savings on to consumers.
For 2021, monopoly markets declined from 12% of the country in 2020 to just 4%.
Lower rates and more choices may make Americans feel more favorably toward Obamacare than they already do. According to a recent survey, 55% of Americans support the ACA generally, and 79%—including a majority of Republicans—do not want the Supreme Court to overturn the ACA’s protections for people with preexisting conditions.
Voters aren’t the only ones who might be more attached to the ACA than political rhetoric suggests. Insurers have been quietly profiting from the ACA, racking up record high gross margins before the pandemic, and maintaining strong performance during it.
With the Supreme Court set to hear arguments in the case against the ACA just days after the election, the ACA may not survive past 2021.
At least this year, millions of Americans who rely on Obamacare can get cheaper coverage—while it lasts.