Health insurance premiums for plans sold on Obamacare’s health exchanges are about to get more expensive next year, according to a glimpse of rate proposals—some with double-digit increases—that the White House made public this week.
Under the Affordable Care Act, insurers are required to make public any rate proposals that increase by at least 10 percent on the federal government’s website. Though premium rates vary significantly depending on the region, major carriers including UnitedHealthcare, Athena and Blue Cross Blue Shield have proposed rate increases for next year between 10 and 30 percent in a handful of states.
Some are even higher. For example, Blue Cross Blue Shield in Alabama proposes to raise its platinum plan (the highest tiered plan) by 71 percent next year.
Insurers attribute the higher rates to the rising cost of prescription drugs as well as their added costs from new consumers enrolled under the law’s health exchanges.
This is the first year that insurers actually have data on the ACA’s new enrollees—including how healthy or sick they are and how they affect the risk pools. Before this year, insurers were essentially playing a guessing game when setting premium rates for 2014 and 2015, and because of that, many were optimistic and set rates too low.
Of course, the proposed rates published Monday give consumers just a portion of the story—since only significant increases are required to be posted.
The hikes are also not set in stone. Insurers still have to go through the process of negotiating with state insurance regulators before any rates can be finalized.
Still, the increases in some plans could be bad news for the Obama administration—which has made expanding affordable coverage a primary goal of the entire law.
Obamacare has already taken heat for not yet making coverage more affordable. A recent study from the Commonwealth Fund found that more people with health insurance still can’t afford to seek treatment—mainly because they’re enrolled in higher deductible policies.
According to the study, about 23 percent of Americans with coverage are considered underinsured—up from 12 percent in 2003. That means roughly 31 million Americans who bought health insurance still have trouble affording treatment under their policies.
If rates increase, that figure will likely be even higher.
The news of potentially higher rates next year comes just weeks before the Supreme Court is expected to issue a ruling in the high-stakes case of King v. Burwell.
If the Court rules against the Obama administration, nearly 90 percent of people enrolled in health coverage on the federal exchange, Healthcare.gov, will see their premiums shoot up dramatically, as their subsidies used to make coverage more affordable would be deemed invalid.
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