Proposed individual health insurance premiums on the Affordable Care Act exchange for 2021 will drop by more than a fifth from this year, the New Hampshire Insurance Department announced last week. But in actuality, the decreases won’t help many of those who need it the most.

While the premium decreases will help about a third of the 54,000 people on the individual market who make too much to qualify for a subsidy, it will make little difference for those with lower incomes. That’s because, under the Affordable Care Act, their subsidies will go down about the same amount as the decrease.

According to the agency, the proposed rate of a silver plan, the second lowest, will go down from $404.80 a month to $38.95, a 21.12% decrease.

Proposed silver rates on individual plans sold by the three insurers on the individual market will decrease by an average of 15.37% for Anthem, 13.54% from Harvard Pilgrim and 12.1% from Celtic Insurance. The cuts run from as low as 3.83% (Celtic) to a high of 19.4% (both Harvard Pilgrim and Anthem’s Matthew Thornton).

That silver rate is something of a benchmark used to calculate subsidies.

The reason for the decrease, said the department, is due to market forces and a new way of subsidizing insurance premiums — a process approved by the federal government on Aug. 5.

The waiver sought by the state is an attempt to prop up the individual market, which was shaky even before the pandemic hit the economy.

Under the waiver program, the federal money lowers premiums for those on the exchange to fund a reinsurance program that pays nearly three-quarters of the cost of high-cost claims. With that risk lowered, insurers can lower premiums enough so that those losing the subsidies can still pay the same amount, while those with them pay a lot less.

But the program needs to be revenueneutral. So New Hampshire will fund it to the tune of $13.5 million by taxing group plans, reinsurance plans and individual plans. That should increase premiums for those on the individual market by about 6%, according to NovaRest, an actuarial consultant for the Insurance Department.

— BOB SANDERS