In most of the country, Affordable Care Act exchange plan prices may look a lot cheaper to healthy, low-income consumers who just want to get covered in 2017 than they do to sick people, higher-income people, or agents and brokers.
Consultants in a Washington-based health policy tracking unit at McKinsey & Co. have published data supporting that conclusion in a new analysis. The McKinsey consultants looked at how the ACA advanced premium tax credit subsidy program will affect what low-income and moderate-income exchange users really pay for 2017 exchange coverage.
The consultants came up with numbers that echo what managers of Colorado's state-based Connect for Health Colorado exchange have been saying: Real cash payment prices may be falling for consumers who are eligible for subsidies and are wiling to switch plans to get the lowest possible premium.
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The consultants found that the median cost of the cheapest available silver plan, or mid-level plan, will rise 24 percent in 2017. That rate of increase is up from 13 percent in 2016, and up from 4 percent in 2015.
Roughly 15 percent of ACA exchange users pay the full cost of exchange plan coverage. The 24 percent increase in the cost of the cheapest silver coverage will hit those exchange users hard.
The cost of better, gold coverage is rising 32 percent, and that might hit the kinds of higher-income people who pay the full price, and expect a decent level of benefits, even harder.
But, for people who qualify for the ACA Advanced Premium Tax Credit subsidy and are willing to change plans to get the cheapest possible silver coverage, the picture looks a lot different, the consultants say.
The average amount of cash those subsidized people will have to spend each month for coverage, after including the Advanced Premium Tax Credit subsidy, will fall in about half of the country and increase less than 5 percent in most of the rest of the country.
The only states in which typical subsidy users who are willing to switch plans will see net costs rise more than 10 percent are in Arizona, Idaho, Iowa, Kansas, Maine, Missouri and Tennessee.
The cheapest silver plan game
The McKinsey consultants also found signs that Medicaid plan issuers, provider-controlled plans and Consumer Operated and Oriented Plan carriers are holding their own, or growing, in spite of reports of unhappiness at provider plans and the wave of CO-OP carrier failures.
About 3 percent of consumers will see a CO-OP offering the cheapest silver plan in their counties in 2017, up from 2 percent in 2016.
Medicaid plan issuers' share of the cheapest silver market slots will rise to 38 percent, from 28 percent. Providers plans' share will hold steady at 18 percent.
The big national issuers' share of the cheapest silver slots will sink to 7 percent, from 18 percent.
The Blue Cross and Blue Shield carriers' share will rise modestly, to 29 percent, from 24 percent, according to the McKinsey analysis.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
