Lower ACA Premiums May Mask Higher Overall Health Insurance Expenses as Out-of-Pocket Costs Rise for Consumers in 2020, According to eHealth Analysis
SANTA CLARA, Calif., Nov. 1, 2019 -- With open enrollment for 2020 health plans under the Affordable Care Act (ACA) beginning today, eHealth, Inc. (NASDAQ: EHTH) (eHealth.com) has released an analysis of federal marketplace plan data showing that lower 2020 premiums may be canceled out by higher out-of-pocket costs for many consumers.
"It's great news for consumers that premiums have stabilized and many people will see their monthly costs drop. But if you dig a little deeper into the 2020 plan data, you see that while average premiums are declining, out-of-pocket costs are increasing commensurately," said eHealth CEO Scott Flanders.
A recent eHealth survey showed that the number one thing people worry about when they need medical care is their out-of-pocket costs. However, 54% say that premium costs are their top consideration when shopping. Despite lower premiums, it is still important for people to review their coverage options for next year.
"Even if you received a notice from your insurer saying that your premium is going down, you need to compare options and make sure you have the protection from out-of-pocket costs you need should you or a family member fall ill," Mr. Flanders said.
Four Important Considerations Consumers Should Be Aware Of:
Premiums Are Declining
eHealth's analysis shows that 2020 premiums are decreasing for individuals and families compared to 2019:
- Average Bronze plan premiums are decreasing 3% (from $407 to $393 per month) for 40-year-old individuals and 4% (from $1,299 to $1,253) for a family of four.
- Average Silver plan premiums are decreasing 6% (from $542 to $512 per month) for 40-year-old individuals and 6% (from $1,729 to $1,633) for a family of four.
Out-of-Pocket Costs Are Going Up
2020 deductibles and maximum out-of-pocket limits are increasing compared to 2019:
- Average Bronze plan deductibles are increasing 4% (from $6,181 to $6,419) for 40-year-old individuals, while the average maximum out-of-pocket limit is also increasing 4% (from $7,458 to $7,731).
- For a family of four, average Bronze plan deductibles are increasing 3% (from $13,017 to $13,394), while the average maximum out-of-pocket limit is increasing 4% (from $14,916 to $15,462).
- Average Silver plan deductibles are increasing 6% (from $4,050 to $4,292) for 40-year-old individuals, while the average maximum out-of-pocket limit is increasing 5% (from $7,436 to $7,776).
- For a family of four, average Silver plan deductibles are increasing 5% (from $8,379 to $8,820) for a family of four, while the average maximum out-of-pocket limit is also increasing 5% (from $14,873 to $15,551).
Potential Costs for the Unsubsidized Remain High
In states served by the federal marketplace, middle-class individuals who earn more than about $50,000 and families who earn more than about $103,000 will not receive government subsidies. As such:
- An unsubsidized 40-year-old enrolled in a Bronze plan – the plan type most commonly selected by unsubsidized consumers – faces a potential financial responsibility of $12,447 for 2020, in combined average annual premiums ($4,716) and average maximum out-of-pocket costs ($7,731).
- An unsubsidized family of four enrolled in a Bronze plan faces a potential financial responsibility of $30,498 for 2020, in combined average annual premiums ($15,036) and average maximum out-of-pocket costs ($15,462).
Unsubsidized Consumers May Find Additional Options Beyond Government Sites
Consumers who do not qualify for ACA subsidies will often find additional ACA plans outside of government-run marketplaces:
- Healthcare.gov does not display all ACA-compliant health plans available to people who pay the full cost of their health insurance coverage.
- Many insurers offer "off-exchange" health plans that comply with the law and that may provide preferred costs or coverage.
Read eHealth's analysis.
eHealth, Inc. (NASDAQ: EHTH) owns eHealth.com, a leading private online health insurance exchange where individuals, families and small businesses can compare health insurance products from brand-name insurers side by side and purchase and enroll in coverage online and over the phone. eHealth offers thousands of individual, family and small business health plans underwritten by many of the nation's leading health insurance companies. eHealth (through its subsidiaries) is licensed to sell health insurance in all 50 states and the District of Columbia. eHealth also offers educational resources, exceptional telephonic support, and powerful online and pharmacy-based tools to help Medicare beneficiaries navigate Medicare health insurance options, choose the right plan and enroll in select plans online or over the phone through Medicare.com (www.Medicare.com), eHealthMedicare.com (www.eHealthMedicare.com), GoMedigap (www.goMedigap.com) and PlanPrescriber.com (www.PlanPrescriber.com).
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