Obamacare is having a difficult year with enrollment lower than once expected, several more co-ops failing and double-digit rate increases expected for next year. From the Detroit Free Press, prices on the exchange are expected to rise 17.3% next year:
Of the 14 insurers with individual market plans, 10 are seeking increases exceeding 10%. They include a proposed 13.9% average increase by Priority Health, 18.7% by Blue Cross Blue Shield of Michigan, 16.8% by Health Alliance Plan and 39.2% by Humana.
As always with these stories it has to be said that the overwhelming majority of people buying these plans will be shielded from the increase in premiums by government subsidies. However that’s not true for everyone:
Michiganders such as Tim Lee, 61, of Escanaba, whose household makes over the tax credit thresholds, must bear the full cost of their health plan and whatever increase gets enacted next year…
He said he pays $671 a month for his “bronze premier” plan that has a hefty $6,300 deductible, which means he generally must spend that much out of pocket before insurance kicks in. So he wasn’t happy to learn that Blue Cross wants to raise its individual plan rates by 9.6% to 19.2% next year, or an average of 18.7%. The proposed increases would affect 116,000 covered individuals, including Lee.
“Frankly we can afford it, which is why we’re not getting any subsidies,” said Lee, whose wife qualifies for Medicare. “But it still is a kick, to say the least.”
Lee may be able to afford it, but an extra $100 (or thereabouts) a month is pretty significant, especially since this is only a bronze plan with a large deductible.
Michigan’s requested premium increase for 2017 is lower than the weighted national average. The site ACAsignups is tracking requested rate increases as they are made in each state. So far, the weighted national average (based on 37 states which make up 84% of the U.S. population) is hovering near 23 percent.
These rate increases are likely to exacerbate an ongoing problem with Obamacare. The program is appealing to those getting maximum subsidies but the people who don’t get those subsidies are facing both high premiums and high deductibles. That’s one reason the CBO lowered its Obamacare enrollment expectations earlier this year. From the CBO report:
CBO and JCT have also revised downward their projection of unsubsidized enrollment in nongroup coverage through health insurance marketplaces because such enrollment
has been smaller than they anticipated in the first two years that the marketplaces have been in operation.
The current projection is 12 million enrolled by the end of this year but the program is likely to miss that goal.