2017 Insurance Exchange Premiums to be Dramatically Higher

By October 25, 2016Commentary

As predicted by many neutral observers at the time of its passage, insurance premiums for plans sold through the reform law exchanges are skyrocketing, with 2017 being the year that makes it plain to all that these exchanges are not, and realistically never could, work as advertised.  State and federal regulators have had to acknowledge that medical costs under these plans have been far greater than anticipated, and therefore have been forced to approve substantial rate hikes.  Both a release from Health and Human Services and a Kaiser Family Foundation Analysis confirm the bad news we have seen in headlines for months.   (KFF Analysis)  (HHS Release)   Here is a prime example of how this Administration lies–they say that for the median exchange enrollee premiums for the benchmark silver plans are increasing 16%, while the reality is that the more important average increase is actually 25%.   The HHS release makes you want to barf with its attempted positive tone, citing a very few states with smaller premium increases and ignoring the many with very high increases, and even attempting to say that there is still a lot of plan choice, when so many insurers have dropped out that there is substantially less choice than even a year ago.

The KFF analysis is more neutral and honest.  Here is an example; in 2016 the lowest benchmark monthly premium was $186 in Albuquerque; in 2017 it is $227 in Providence.  There are some almost unbelievable spikes.  For example, the benchmark premium in Phoenix will go from $207 per month to $507.  There are some decreases; for example in Providence the benchmark declines from $263 a month to $227.  But the declines are few and are of a much smaller magnitude than the increases.  Just looking at the KFF chart of major metropolitan areas, a majority have double-digit increases, many in the 20%, 30% and 40% range.  And choice is more limited; the average number of insurers on the federal exchange is 3.9 in 2017, down from 5.4 in 2016.  Many states now have only 1 or 2 insurers offering plans on the exchange.

The Administration has consistently flat-out lied about the cost of health insurance under the reform law, and its recent releases continue that trend, trying to gloss over the obvious fact that for almost all enrollees, premiums are rising dramatically, for lousy coverage, and that plan choice has dropped equally dramatically.  But for taxpayers, perhaps the most offensive thing is the stress on the fact that exchange enrollees will get even more in subsidies to pay for this expensive, lousy coverage.

 

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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