Health Care Law Sees Big Premium Hikes 10/25 06:54
Premiums will go up sharply next year under President Barack Obama's health
care law, and many consumers will be down to just one insurer, the
administration confirmed Monday. That's sure to stoke another "Obamacare"
controversy days before a presidential election.
WASHINGTON (AP) -- Premiums will go up sharply next year under President
Barack Obama's health care law, and many consumers will be down to just one
insurer, the administration confirmed Monday. That's sure to stoke another
"Obamacare" controversy days before a presidential election.
Before taxpayer-provided subsidies, premiums for a midlevel benchmark plan
will increase an average of 25 percent across the 39 states served by the
federally run online market, according to a report from the Department of
Health and Human Services. Some states will see much bigger jumps, others less.
Moreover, about 1 in 5 consumers will have plans only from a single insurer
to pick from, after major national carriers such as UnitedHealth Group, Humana
and Aetna scaled back their roles.
"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," said Larry Levitt, who tracks the health
care law for the nonpartisan Kaiser Family Foundation.
Republicans pounced on the numbers as a warning that insurance markets
created by the 2010 health overhaul are teetering toward a "death spiral."
Sign-up season starts Nov. 1, about a week before national elections in which
the GOP remains committed to a full repeal.
"It's over for Obamacare," Republican presidential candidate Donald Trump
said at a campaign rally Monday evening in Tampa, Florida.
Trump said his Democratic rival, Hillary Clinton, "wants to double down and
make it more expensive and it's not gonna work. ... Our country can't afford
it, you can't afford it." He promised his own plan would deliver "great health
care at a fraction of the cost."
The new numbers aren't too surprising, said Sen. Orrin Hatch, R-Utah, who
chairs a committee that oversees the law. It "does little to dispel the notion
we are seeing the law implode at the expense of middle-class families."
HHS essentially confirmed state-by-state reports that have been coming in
for months. Window shopping for plans and premiums is already available through
Administration officials are stressing that subsidies provided under the
law, which are designed to rise alongside premiums, will insulate most
customers from sticker shock. They add that consumers who are willing to switch
to cheaper plans will still be able to find bargains.
"Headline rates are generally rising faster than in previous years,"
acknowledged HHS spokesman Kevin Griffis. But he added that for most consumers,
"headline rates are not what they pay."
The vast majority of the more than 10 million customers who purchase through
HealthCare.gov and its state-run counterparts do receive generous financial
assistance. "Enrollment is concentrated among very low-income individuals who
receive significant government subsidies to reduce premiums and cost-sharing,"
said Caroline Pearson of the consulting firm Avalere Health
But an estimated 5 million to 7 million people are either not eligible for
the income-based assistance, or they buy individual policies outside of the
health law's markets, where the subsidies are not available. The administration
is urging the latter group to check out HealthCare.gov. The spike in premiums
generally does not affect the employer-provided plans that cover most workers
and their families.
In some states, the premium increases are striking. In Arizona, unsubsidized
premiums for a hypothetical 27-year-old buying a benchmark "second-lowest cost
silver plan" will jump by 116 percent, from $196 to $422, according to the
But HHS said if that hypothetical consumer has a fairly modest income,
making $25,000 a year, the subsidies would cover $280 of the new premium, and
the consumer would pay $142. Caveat: if the consumer is making $30,000 or
$40,000, his or her subsidy would be significantly lower.
Dwindling choice is another issue.
The total number of HealthCare.gov insurers will drop from 232 this year to
167 in 2017, a loss of 28 percent. (Insurers are counted multiple times if they
offer coverage in more than one state. So Aetna, for example, would count once
in each state that it participated in.)
Switching insurers may not be simple for patients with chronic conditions.
While many carriers are offering a choice of plan designs, most use a single
prescription formulary and physician network across all their products,
explained Pearson. "So, enrollees may need to change doctors or drugs when they
switch insurers," she said.
Overall, it's shaping up to be the most difficult sign-up season since
HealthCare.gov launched in 2013 and the computer system froze up.
Enrollment has been lower than initially projected, and insurers say
patients turned out to be sicker than expected. Moreover, a complex internal
system to help stabilize premiums has not worked as hoped for.
Nonetheless, Obama says the underlying structure of the law is sound, and
current problems are only "growing pains." The president has called for a
government-sponsored "public option" insurance plan to compete with private
Republicans, including Trump, are united in calling for complete repeal, but
they have not spelled out how they would address the problems of the uninsured.
Clinton has proposed an array of fixes, including sweetening the law's
subsidies and allowing more people to qualify for financial assistance.
The law makes carrying health insurance a legal obligation for most people,
and prohibits insurers from turning away the sick. It offers subsidized private
plans to people who don't have coverage through their jobs, along with a state
option to expand Medicaid for low-income people.
Largely as a result, the nation's uninsured rate has dropped below 9
percent, a historically low level. More than 21 million people have gained
coverage since the Affordable Care Act passed in 2010.