Benchmark premiums for ACA silver plans decrease, but costs vary by county

Premiums for the benchmark silver plan in the Affordable Care Act are decreasing by just over 3% across the nation, although they vary by county. This is the fourth consecutive year that benchmark premiums have fallen.

“The benchmark plan premiums are important, because they are used to determine the tax credits available to people who buy their own insurance through the Marketplaces,” according to an analysis by KFF. “What people would have to pay in premiums, if anything, will depend on where they live, the plan they choose and their age and income.”

This analysis looked at changes in premiums after tax credits for the lowest-cost bronze, silver and gold plans by county for a 40-year-old at varying income levels. Key findings include:

• Across counties, average premiums before tax credits fell 1.8% for the lowest-cost silver plan and 4.1% for the lowest-cost gold plan. Average premiums changed little for the lowest-cost bronze plan (up 0.3%).
• Because of this year’s American Rescue Plan Act, people with incomes up to 150% of the federal poverty level are eligible for a silver-level plan without a monthly premium and with additional cost-sharing subsidies to lower their deductibles and other out-of-pocket expenses. In two-thirds of counties, tax credits also would cover the full premium for the lowest-cost silver plan for a 40-year-old earning $20,000 a year (155% of the poverty level).
• In one-third of counties, tax credits would cover the full cost of the lowest-premium bronze plan for a 40-year-old earning $35,000 a year (272% of the poverty level). Such plans typically have high cost-sharing requirements but provide substantial protection in case of severe illness.

“Because of ARPA subsidies, enrollees with incomes between 100% and 150% of poverty qualify for free or nearly free benchmark and lowest-cost silver plans, with substantially reduced out-of-pocket costs,” analysts concluded. “Enrollees with incomes over 150% of poverty in many parts of the country can similarly qualify for free or nearly free silver and bronze plans. The benchmark silver plan is the basis for determining the amount of financial assistance people receive. The large tax credit may cover all or most of the cost of the lowest-cost silver or several bronze plans.

“While free bronze plans will be available to subsidized enrollees in many counties in 2022, it is still important for low-income enrollees to consider the significant cost-sharing assistance that is only available if they enroll in a silver plan. Marketplace enrollees eligible for cost-sharing subsidies are often best off in a silver plan, which will reduce their out-of-pocket costs when they need medical care.”