Health Care Premiums to Jump by 25 Percent in 2017

Administration says coverage on Healthcare.gov will remain affordable

Posted October 25, 2016 at 6:34pm

Premiums will spike by an average of 25 percent next year for plans purchased on HealthCare.gov, according to a Monday report from the Obama administration.

Even with the dramatic increase for the so-called benchmark plans, more than two-thirds — 72 percent — of the Americans who get their health insurance through HealthCare.gov will be able to find plans for less than $75 per month, the report said. About 77 percent will be able to purchase plans under $100 per month.

The figures, based on analysis of newly published prices for the upcoming open enrollment period that begins Nov. 1, rely heavily on the availability of advanced premium tax credits that are available under the 2010 health law, which about 85 percent of consumers on the exchanges receive. About the same proportions of consumers had similar options last year.

The report underscores the challenges the health law has faced this year — and the range of experiences marketplace consumers will face. The 25 percent increase belies some areas where premiums will jump by more than 50 percent. In some states, however, premiums will rise by less than 7 percent. Major insurance companies have also withdrawn from the marketplaces because of financial losses, diminishing consumer choice.

“Even in places with high rate increases this year, consumers will be protected,” said Katie Martin, the Health and Human Services assistant secretary of planning and evaluation. “As this analysis shows, the Affordable Care Act was designed with price-sensitive consumers in mind. … The odds are good you’ll find plans more affordable than the public debate about the ACA might lead you to expect.”

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The report backs up a favorite administration talking point: that because the subsidies increase as premiums increase under the health law, coverage will remain affordable despite the hikes. In fact, the percentage of people eligible for subsidies will now increase, because that eligibility is tied to monthly premiums.

The administration is hoping to sign up as many as 13.8 million people during the upcoming open enrollment period, up from the 12.7 million it signed up during a similar period last year.

Martin and Kevin Griffis, the assistant secretary for public affairs for HHS, acknowledged that the premium increases this year are higher than in years past. Last year, one independent analysis found a nationwide average premium increase of about 12 percent before that open enrollment period.

Martin and Griffis said this year’s increase could be attributed to factors like “issuers bringing their rates in line with observed costs,” and the expiration of two of the health law’s premium stabilization programs, as well as limits placed on one of those programs by lawmakers. They also contrasted the 25 percent average jump for so-called benchmark plans with the median increase for the same plans, which will be 16 percent.