Obamacare shoppers in most states will see premiums rise by 22 percent and have 36 percent fewer plans to choose from next year, according to insurance plan data released Monday by the Obama administration.
The buffet of 2017 plan options is decidedly smaller and pricier than in years past, prompting officials to stress the availability of federal subsidies for most consumers and the importance of shopping around for more affordable coverage.
When the Affordable Care Act’s fourth enrollment season begins Nov. 1, consumers in the 38 states using the federal healthcare.gov marketplace will see median prices for the cheapest plans in the middle silver tier rise 16 percent. Average rates in those plans will rise by 25 percent and by 22 percent when factoring in three state-run marketplaces for which data were available.
There also will be a sharp reduction in insurer competition next year, as some of the country’s largest companies have scaled back their marketplace participation or withdrawn altogether, under heavy financial losses from new enrollees.
Consumers in the healthcare.gov states will have an average of 30 health plans to choose from next year, compared to an average of 47 plans this year. An average of six insurers plan to sell in each state marketplace, although there’s wide variation in the number of issuers and some are selling only in parts of states.
Five state marketplaces will have just one Obamacare insurer, while nine more including the District of Columbia will have only two. On the other end of the spectrum, seven states will have 10 or more marketplace insurers.
That’s significantly less competition than the 2016 enrollment year, when Wyoming was the only state with just one marketplace insurer and 11 states had at least 10.
While acknowledging the troubling marketplace developments, officials with the Department of Health and Human Services emphasized that most shoppers won’t feel the increased costs because they’re eligible for federal subsidies to blunt the price increases.
“I think one of the things we’re going to be doing over and over again is we’re going to be talking about that for the vast majority of marketplace consumers, the headline rates are simply not what they pay,” said HHS spokesman Kevin Griffis.
About three in four Americans buying Obamacare plans this year will qualify for enough subsidies next year that their premiums could cost them $100 or less, according to estimates from HHS. In an example provided by the agency, a 27-year-old living in Dallas and earning $25,000 would pay $137 in monthly premiums for the second-lowest-cost silver plan, after subsidies are applied.
“Thanks to financial assistance, most marketplace consumers this year will find plan options with premiums between $50 and $100 per month,” HHS Secretary Sylvia Mathews Burwell said.
HHS has estimated that returning consumers could reduce their monthly premium payments 20 percent if they switched to the lowest-cost plan in any of the gold, silver or bronze tiers of plan, although that likely would require them to accept higher out-of-pocket costs or deductibles or narrower provider networks.
Officials also have noted that some insurers initially underpriced their marketplace plans, forcing them to subsequently raise rates dramatically in states including Arizona, Kansas, Pennsylvania and Hawaii. Two programs that transferred funds to insurers with large losses are ending next year, eliminating some extra financial padding they had been relying on.
Yet the marketplace woes have raised ongoing questions about whether it will be an affordable place in the future for Americans without access to employer-sponsored coverage and have caused many proponents of the healthcare law to call for adding a government-funded, public option plan.
Consumers in some states are likely to be dismayed by the 2017 plan offerings. For example, a 27-year-old in Arizona with a $196 premium for a silver plan would see the price increase to $422 next year, an increase of 116 percent. The average second-lowest-cost silver plan, a popular choice for consumers, will cost 69 percent more in Oklahoma and 63 percent more in Tennessee.
There are a few bright spots in the data. Average silver plan premiums are falling in price in two states, Indiana and Massachusetts. In nine more states, they will rise by just single digits.
The Obama administration says it is starting a more targeted marketing push than before to convince the remaining uninsured to sign up. Officials said Monday that a big part of the messaging will be making sure people know subsidies are available.
“Even in places with high rate increases this year, consumers will still be protected,” Griffis said.
