Thanksgiving is this Thursday. It may seem hard to believe, but even in this year unlike any other, there’s still plenty to be thankful for—including some notable developments in healthcare policy.
1. Individual health insurance premiums have stabilized and declined.
Open enrollment on the HealthCare.gov exchanges run by the federal government goes through December 15. In some states, open enrollment is even longer. California, for instance, allows people to sign up through its Covered California exchange through January 31.
When people log on to shop for a plan, they may be pleasantly surprised at what they find.
President Trump may have spent much of his presidency lobbying for Obamacare’s repeal. But on his watch, premiums for exchange plans decreased for three straight years. Next year, premiums for “benchmark” plans will fall 2%. That’s a decline to $379 a month for a 27-year-old, from $389 a month last year. For a family of four, that plan will run $1,486 in 2021, compared to $1,524 last year.
Since 2018, average monthly premiums for that benchmark plan have dropped almost 8% for our hypothetical 27-year-old—and 6.5% for our family of four. That’s equivalent to $32 a month in savings for the twentysomething—and $104 a month in savings for the family.
Competition is helping to drive these lower prices. More insurance companies than ever are now participating in the exchanges. Just 4% of enrollees will have only one plan choice this open enrollment, down from 29% in 2018.
2. It’s easier to access affordable health coverage.
Because of the pandemic-induced economic crisis, millions of people lost their jobs—and with them, their employer-sponsored health insurance. But thanks to several actions taken by the Trump administration pre-pandemic, they have access to more affordable health insurance options than under the Obama administration.
Consider short-term, limited-duration health plans. They aren’t subject to Obamacare’s cost-inflating regulations and mandates, so they’re less expensive than what’s for sale on the exchanges.
In 2018, the Trump administration expanded the maximum duration of a short-term plan from three months to 12 months. And it allowed insurers to renew the coverage for up to three years.
Those moves have made short-term plans a viable alternative to conventional exchange coverage in the 22 states where they’re available on the terms promulgated by the Trump administration. Other states have implemented more stringent regulations that blunt short-term plans’ impact.
A healthy 30-year-old in Atlanta can buy a mid-level short-term plan for $250 a month, nearly 50% less than the $467 a month a similar plan costs on the Obamacare exchange. A 60-year-old smoker in Atlanta could get a short-term plan for $888 a month; the comparable exchange plan is 27% more expansive, at $1,227 a month.
Workers can also be thankful for the expansion of health reimbursement arrangements, or HRAs. Employers have long been able to deposit untaxed dollars into HRAs for their employees to use for out-of-pocket healthcare expenses. In 2019, the Trump administration finalized a rule effective January 1, 2020, that allows employees to use HRA funds to purchase individual coverage that they would then own personally.
This could have huge implications for the health insurance market. Employers could re-assert some level of control over their health insurance expenditures. Rather than spending ever-greater amounts on employer-sponsored coverage and having to manage benefits programs themselves, they can commit to a defined contribution toward each employee’s health insurance.
Workers, meanwhile, could choose plans that work for them, rather than their employers. Because they’d control their healthcare dollars, they’d have a strong incentive to shop around for the best deal. And with an army of potential customers entering the individual market with HRA dollars to spend, insurers would surely ramp up their offerings to meet that demand. Such competition would result in lower prices and better quality.
The Trump administration expects 11.4 million Americans to secure individual coverage using HRAs by 2029.
3. Covid-19 vaccines will soon get us out of this pandemic.
Last week, Pfizer PFE -0.6% and Moderna revealed that their vaccine candidates are about 95% effective. Pfizer announced on November 20 that it had applied for emergency use authorization from the FDA. If granted, the authorization could allow the company to begin distributing vaccines in December.
The end of the pandemic now appears in sight. In the meantime, therapeutic treatments are saving the lives of people who contract the virus. Earlier this month, the FDA gave emergency authorization to bamlanivimab, an antibody therapy from Eli Lilly LLY -2% that has been shown to prevent hospitalizations and reduce Covid-19 symptoms if administered early on.
Thanksgiving may be a little more subdued this year. But for those who follow health policy and are invested in making healthcare more affordable and of higher quality, there is indeed reason to be thankful.