Exchange Premiums Are Going Up Significantly in 2016

An analysis conducted by the Robert Wood Johnson Foundation suggests that most consumers who buy on the public health insurance exchanges will see much higher premiums in 2016.  (RWJ Analysis)  I know that is shocking to all of us who have believed that the reform law, promulgated by the most enlightened Administration and Congress we have ever had, just certainly would reduce health insurance costs.  What could possibly have gone wrong, with such geniuses working to solve the problem?  But for a moment, rather than focusing on these egocentric morons, let’s think about the pain and anxiety this is causing average Americans, who have very slowly rising personal incomes.  A few snapshots of information.  The average silver-level plan premium, which is the level subsidies are tied to and the most popular level, will increase 11%.  For most categories deductibles are also going up.  A 27-year-old male will face an average silverpremium of $300 a month, and the deductible in that plan rose a mean 8%.  Gold plans have better benefits, but their premiums went up an average of 14%.  How would you like to live in these states–in Washington, where the average deductible went up 75%, Mississippi, up 42% or South Carolina, up 37%.  My home state, Minnesota, proudly can claim an average premium increase of over 30%, as can Hawaii, Alaska and Montana.  Most states, and the most populous states, are seeing premium increases and deductible growth well above GDP or personal income growth.  Only four states are seeing a decline in silver plan premiums.

One real effect of these increases is that fewer people will be able to afford coverage and more will just decide they are going to go uninsured and take their chances with the penalty, which is riddled with exemptions and has few enforcement mechanisms.  The rational decision for a younger, or even middle-aged healthy person is to forego buying this ridiculously expensive health insurance which has high cost-sharing anyway, save some money in case you run into a need for medical services and tell the IRS to take the penalty and shove it where it belongs, which incidentally is the same place the reform law came from in the first place.