Tags: Barack Obama | Healthcare Reform | health | insurance | rates | dramatic | increase

Insurers Seeking Big Obamacare Rate Hikes for Next Year

By    |   Wednesday, 10 Jun 2015 07:06 PM

Health insurance prices may jump dramatically next year as some insurers are requesting double-digit rate increases.

State governments are likely to grant increases that are less than requested, but those who pay for their own insurance out of pocket should still expect a big bite – especially those with the most popular "silver" plans, CNBC reports.

Average plans in major cities could rise as much as 12 percent, according to an analysis by HealthPocket, a website that compares health plans.

Those silver plans could rise by as much as 14 percent, according to HealthPocket.

People insured by health maintenance organization (HMO) and exclusive provider organization (EPO) plans could face 18-to-20 percent hikes, CNBC reported.

Kev Coleman, head of research and data at HealthPocket, called that "really confusing," since HMOs and EPOs are designed to hold costs down.

"Given the rate of general inflation in the country, and the economic situation, the rate increases were surprising to us," Coleman told CNBC.

Coleman said 2016 will be the first year people are seeing true Affordable Care Act rates since the first two years were artificially low.

There was little data for 2015's proposed prices, CNBC wrote, because the prices had to be submitted shortly after people had enrolled in 2014. And a 25 percent increase in insurers in the Obamacare market in 2015 helped cut prices.

No such increase of competition is expected in 2016.

All this means consumers will need to shop around, Forbes.com advises.

"And payers will probably put the best value in products designed to attract new customers [just like telecom companies offer special prices for switchers], so customers will need to switch carriers periodically," Forbes' Todd Hixon says.

The rate hikes caught many by surprise, though Republican foes of the mandatory health care law have warned that prices would spike as the White House insisted the Affordable Care Act would actually cut monthly premiums.

HealthPocket's Coleman told CNBC he was expecting a 6-to-8 percent increase, but he looked at more data than the federal government's own analysis.

People ineligible for subsidies will be the hardest hit, since they have to pay 100 percent of their health care premiums. About 8.7 million people receive subsidies of an average $272 per month, but those who live in states that use the federal exchange could see an even tougher hit if the Supreme Court strikes down subsidies on the federal exchange in its soon-to-be-released King v. Burwell decision. 

Not everyone will see the high increases since rates are based on location and age.

Silver plans are the most popular and likely to see the greatest increases. According to HealthPocket's analysis, a silver plan for a 40-year-old nonsmoker would be $389.49 per month next year, compared to $341 now.

For the same person, a bronze plan would rise 9 percent from $292 per month this year to $319.04 in 2016. A gold plan would go up 16 percent, from $397.65 per month today to $459.34 in 2016.

Platinum plans are the most expensive and also least popular. Their rates would rise 6 percent, from $525.39 per month today to $558.62 in 2016.

If the King v. Burwell decision strikes out subsidies in some states, rates could go up even more, CNBC notes, since many who now receive them would likely stop buying health insurance altogether. Those who forgo insurance are likely to be the youngest and most healthy, leaving them unavailable to help fund those who are older and sicker.

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Health insurance prices may jump dramatically next year as some insurers are requesting double-digit rate increases.
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2015-06-10
Wednesday, 10 Jun 2015 07:06 PM
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