Virginia health insurance premiums are still too high for many customers, report finds

Subsidies have expanded under the American Rescue Plan, but enrollment is expected to drop again unless the state can lower costs
Published: Nov. 17, 2021 at 12:22 PM EST
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Nearly five years after changes to the Affordable Care Act, Virginia is still struggling to control the cost of premiums on the individual health insurance market.

A new report presented Tuesday to the state’s Joint Commission on Health Care found that the average cost of silver plans, a mid-tier option that generally includes some out-of-pocket costs, increased by nearly 60 percent between 2016 and 2021 — raising the monthly price by more than $200 for most customers.

The average cost of premiums for bronze and gold plans also went up, increasing a little more than 37 percent for bronze and 25 percent for gold.

Over the same period, enrollment in Virginia’s health care marketplace dropped by just over 20 percent. And prices remain high even though the cost of premiums has generally lowered over the course of the pandemic — driven by lower-than-normal use of medical services. Without state intervention, analysts warn that participation may continue to drop over the next few years as people struggle to afford higher premiums.

“Average adult costs have increased significantly,” said Stephen Weiss, a senior health policy analyst for the commission. “And even though there’s been some decline, it’s not enough to offset the impact of those increases.”

Most of the changes in enrollment, and costs, can be traced to actions on the federal level. In 2017, Congress eliminated the individual mandate, a key provision in the Affordable Care Act that required most Americans to enroll in health insurance. While its removal didn’t lower market participation as dramatically as many experts expected, the uncertainty drove up the cost of premiums — especially in Virginia, where the average monthly price of silver plans rose by more than $300 between 2017 and 2019.

The same year, the federal government stopped paying insurance companies directly for subsidies offered to many low-income customers. As a result, many carriers incorporated those costs into their premium rates. As prices began to rise, state analysts found that younger, healthier people began to leave the market.

Over the last five years, enrollment drops have been the sharpest among Virginians aged 18 to 34. Medicaid expansion has contributed to some of the losses as more low-income people qualify for government-provided insurance. But among residents who aren’t eligible for the program, Weiss said many have downgraded to bronze plans or left the health care marketplace altogether.


.(Virginia Mercury)

The Virginia Mercury is a new, nonpartisan, nonprofit news organization covering Virginia government and policy.

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