The latest proof that health care policy chaos is having an adverse impact on the Obamacare insurance markets is evident in a new study by Avalere Health. The consulting firm warns of 18 percent average premium increases next year while more than 40 percent of all counties likely will have only one exchange plan to choose from.
The situation could be even worse for consumers in dozens of other counties where major insurers already have announced their intentions to pull out next year to staunch heavy financial losses, leaving consumers to fend for themselves.
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The report’s findings echo the recent Centers for Medicare and Medicare Services (CMS) county-by-county map of Obamacare coverage for 2018 that estimates at least 47 counties, with 35,000 active Obamacare exchange participants, will have no health insurance options next year. An additional 2.4 million people are expected to have only one option for coverage.
The proposed 2018 premiums for the most popular “silver” plan are 18 percent higher on average than this year’s premiums according to Avalere’s survey of eight states where insurers have submitted early rate filings. By comparison, average 2017 silver plan premiums increased by 12 percent from the year before.
It’s no secret that the volatility in the individual markets reflects uncertainty over whether the Republican-controlled Congress will succeed in repealing and replacing the Affordable Care Act, as well as the concerted efforts by the Trump administration to drive Obamacare into the ground with executive orders and threats to withhold vital government cost-sharing subsidies from insurers.
The House narrowly passed its highly controversial version of the legislation in early May, that the Congressional Budget Office (CBO) estimates would eliminate coverage for 23 million Americans over the coming decade. Senate GOP leaders have been working in secret to craft an alternative bill that they intend to send to the floor for a final vote before the July 4th recess.
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But despite Senate Majority Leader Mitch McConnell’s determination to do whatever is necessary to pass the emerging plan, final passage is still very much in doubt.
“The debate over the Affordable Care Act and cost-sharing reduction funding casts uncertainty over the market,” Dan Mendelson, president of Avalere, said in a statement. “But despite all of this activity, the vast majority of consumers will still have commercial exchange options in 2018.”
Mendelson and others note that final rates will vary from proposed premiums and that consumers’ monthly costs are contingent on where they live, the type of plan they choose, and the size of the federal tax subsidies. Insurers have until June 21 to make initial premium filings for next year using HealthCare.gov.
The Avalere report was based on the review of early filings in seven states and the District of Columbia. The requested premium increases for the popular silver plan ranged from as little as eight percent in Vermont, 13 percent in Oregon, 15 percent in DC and 16 percent in Connecticut, to 17 percent in New York, 22 percent in Virginia, 23 percent in Maine and a whopping 32 percent in Maryland.
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Total signups for Obamacare health plans fell this year for the first time to 12.2 million, compared to 12.7 million a year ago. But signups don’t tell the real story. Of the 12.2 million signups, only 10.3 million individuals “had effectuated their coverage,” (meaning paid their first premium) CMS reported. Of the 12.7 million signups in 2016, only 9.1 million remained at the end of the year.
While insurers and consumers have experienced a bumpy ride within the Obamacare program, the situation has been far more stable for the 156 million Americans with employer-sponsored health insurance.
A Kaiser Family Foundation survey in 2016 of trends in employer-sponsored health coverage found that annual premiums reached $18,142 that year – up three percent from 2015 levels – with workers on average paying $5,277 towards the cost of their coverage.
Large employers’ health care benefit costs are expected to rise by six percent in 2017, according to the National Business Group on Health. While modest compared to the rising costs of Obamacare, the benefit costs in the private sector are well ahead of the general rate of inflation or projected rate of salary increases.
It’s not clear yet how increases in health care costs will translate into higher premiums for employers; some co
