The low-cost silver category of health plans on public exchanges appears to be the best refuge for Americans buying subsidized coverage under the Affordable Care Act, according to new analyses.
The plan categories, from bronze and silver to gold and platinum, are based on the average percentages plans spend on “essential health benefits” that insurers are required to provide in order to sell a policy on an exchange. Silver plans spend 70% on average for such benefits while bronze plans spend 60%; gold plans spend 80%; and platinum 90%.
“Consumers can limit their premium annual increases by selecting a lower-cost silver plan,” Avalere Health’s Caroline Pearson, said in an interview. “Premium subsidies also cap consumer premiums, which can insulate most consumers from these price increases.”
Avalere issued last week an analysis showing average proposed rate increases for 2017 “across all silver plans in the nine states examined range from 19% in Virginia to 5% in Washington.” It’s the most popular category, with nearly 70% of exchange enrollees selecting such plans, Avalere said.
Though many of the rate increases insurers are reporting now to regulators are likely to come down after they are filed and approved, insurers are focusing the most attention on affordability of the silver category, according to recent health plan earnings calls. Open enrollment for 2017 begins Nov. 1 of this year and runs through January 31, 2017.
It’s taken health insurers three years to figure out where they are going to find the most success selling plans on exchanges. Several carriers, including Centene CNC -0.05% and Anthem WLP +%, are considering expanding with new health products in the silver category next year. Aetna AET -0.56%, too, said it may expand to new markets in 2017.
“Our marketplace strategy has been and continues to be focused on targeted low-income subsidized individuals, many of whom were previously Medicaid-eligible,” Centene chief executive Michael Neidorff said during the company’s first-quarter earnings call in April.
UnitedHealth Group UNH -0.88%, for example, is scaling back to a “handful of states” for 2017. UnitedHealth was heavily invested in less popular gold and platinum plans, losing more than $700 million last year . Insurers like Centene appear to be learning from UnitedHealth’s experience.
“They’re in a different market than we are,” Neidorff said of UnitedHealth. “They lost a lot of individuals. They’re at the higher end in the platinum and the gold.”
Avalere vice president Pearson said she expects the silver category to remain the biggest draw for Americans purchasing coverage on the exchanges. “The bulk of exchange enrollees have selected silver plans because the subsidies are tied to those products,” Pearson said. “Demand for these products results in more silver plans being offered than any other metal level, which increases competition and helps keep consumer premiums low.”