As premiums rise, Obamacare is dealt another mighty blow
Premiums for mid-level health plans are set to rise by as much as 25 percent next year, while consumers in several states will find fewer insurance companies offering coverage, according to a report released by the Obama administration last Monday.
The open enrollment period for the Affordable Care Act begins on Nov. 1. Consumers who go without insurance could face tax penalties of $700 a person or more.
One in five consumers using the federal health insurance website HealthCare.gov will find only one insurer with listed offerings, according to the Obama administration’s report.
These limitations are being seen as another hefty blow to President Obama’s signature health law. Rising costs and reduced choice almost guarantee that the legislation will undergo significant alterations under the next presidential administration, something which both Hillary Clinton and Donald Trump have promised to do.
The average rise of 25 percent is distributed widely across the 39 states utilizing the federal exchange. In Arizona, which had the lowest rates of any state in 2016, the average premium rates will rise by 116 percent next year. Meanwhile, in Indiana, premium rates will be 3 percent cheaper.
However, many consumers will be not face the brunt of these price hikes. Approximately 85 percent of those who enroll in the Affordable Care Act programs receive federal subsidies that can lower premiums to less than 10 percent of a person’s income. The subsidies are attached to the second-lowest cost “silver” plan, widely known as the benchmark plan.
Nearly 77 percent of consumers will be able to find a plan for less than $100, officials said in the wake of the report’s release.
“Relatively few people will feel the premium increases, but everyone will hear about them,” Dan Mendelson, president of consulting firm Avalere Health, told CNN. “That will have an effect on the perception of the program.”
However, the premium increases mean that Affordable Care Act will become more expensive as the government must provide larger subsidies. Despite this, the program is still costing less than was originally estimated by the Congressional Budget Office, largely thanks to lower-than-expected enrollment and insurers setting lower prices than was expected.
Still, insurers are rapidly leaving the program. The number of carriers on the federal exchange will drop from 298 to 228. Approximately 21 percent of consumers using the federal exchange will have only one carrier to select from. Five states — Alaska, Alabama, Oklahoma, South Carolina and Wyoming — will only have one insurer providing plans in 2017.