Obamacare Premiums to Rise 25 Percent on Average in 2017
October 29, 2016
President Barack Obama’s administration has confirmed that premiums for Obamacare health insurance plan will rise sharply from next year in a move that is likely to generate a bit of storm as the U.S. presidential election draws near.
The news will serve as another setback for the Affordable Care Act (ACA), which some have argued over time as being ineffectual. Many companies, both big and small, have expressed similar view over the past year, with tens of insurers leaving the ACA exchanges.
A report from the Department of Health and Human Services on Monday revealed premiums for midlevel benchmark plans will rise by an average of 25 percent across 39 states in the U.S. in 2017. The change will be higher in some states and lower in others.
The Obama administration argued that prices are gradually becoming aligned with costs. It said rates through 2016 were 12 to 20 percent less than initial projections by the Congressional Budget Office. Premiums will be roughly in harmony with Congressional Budget Office projections next year with the proposed increases.
“Consumers will be faced this year with not only big premium increases but also with a declining number of insurers participating, and that will lead to a tumultuous open enrollment period,” Larry Levitt, who tracks the Obama healthcare law for Kaiser Family Foundation, told the Washington Post.
Many insurance companies have pulled out from the Obamacare health insurance program. America’s largest insurer, UnitedHealth Group, is among those that have scale back their participation. Humana and Aetna have taken similar steps.
Oscar, a company set up mainly for ACA purposes, has announced that it would be pulling out of the Dallas and New Jersey markets, according to Business Insider.
The administration said 83 insurers are leaving the ACA exchanges while 15 will be joining.
Most people enjoying Obamacare health insurance will be protected from the effect of higher premiums, the administration stated. It explained that subsidies guaranteed by the law will neutralize shock from the increase since they are designed to increase with premiums. Also, clients will be able to save money if they chose to migrate to cheaper plans.
Majority of the over 10 million customers served through HealthCare.gov and state-run counterparts are provided with generous financial assistance. Enrollment in the federally-run online market is concentrated among households with very low incomes.
The administration has advised an estimated 5 to 7 million people who are currently not enjoying the taxpayer-funded subsidies to take advantage of offers available on HealthCare.gov
The Republicans have seized on the increased premiums to say the Obamacare health insurance markets are heading towards demise. Its presidential candidate, Donald Trump, told audience at a campaign rally in Tampa, Florida Monday evening that “it’s over for Obamacare.” He claimed Democratic candidate Hillary Clinton planned to make it more expensive, promising to deliver “great health care at a fraction of the cost” with his own plan.
However, President Obama remains optimistic about the healthcare plan.
“You’re getting better quality, even though you don’t know that Obamacare is doing it,” he told audience in Florida last week.