Health care premiums will rise, so what can you do?
It wasn't a matter of if, but more like how much. Health care analysts and actuaries have been predicting for weeks now that Affordable Care Act exchange members would likely see premium increases for 2017 around 10 percent on average.
Preliminary reporting shows those predictions are accurate. In a study of 14 major metro areas by the Kaiser Family Foundation, premiums for the second-lowest-cost silver medical plans (the plans that tax credits are based on) are expected to rise an average of 11 percent in 2017. In the cities Kaiser studied, complete data was available on insurer premium change requests. It found the changes range from a decrease of 13 percent in Providence, Rhode Island, to an increase of 18 percent in Portland, Oregon.
The situation is dire for low-income consumers. According to a Commonwealth Fund study released Thursday, low-income adults who qualify for Medicaid under the Affordable Care Act but live in a state that hasn't expanded Medicaid will likely pay higher out-of-pocket costs for less comprehensive insurance coverage.
The Kaiser analysis also shows that so far, marketplace premiums are rising faster for 2017 then they have in years past.
Why?
A major factor relates to one of Obamacare's greatest strengths. Now that people with preexisting conditions qualify for coverage, insurers may have underestimated the amount of health care services these people need. In addition, special subsidies given to insurers in the beginning of Obamacare have come to an end. That's on top of rising health care costs in general, especially prescription drug costs.
Added Dave Dillon, fellow at the Society of Actuaries: "Insurers developed rates for the exchanges back in 2014 with no data." At best it was an educated guess, he explained. It's no wonder lots of insurers underestimated their costs.
Premium increases are also expected to hit employer-sponsored plans in 2017, but employers often offset those rises by passing on the costs to employees in the form of higher deductibles, co-pays and other out-of-pocket payments.
What can you do if you're looking at a big jump in your premium?
Check, check and check again if you qualify for a subsidy. The government estimates that 87 percent of people who buy marketplace plans can receive a subsidy or premium tax credit to help lower costs. Check with Healthcare.gov and update your income information each year to make sure you're getting the assistance you qualify for.
Be willing to change plans. True, all the jumping around in the marketplaces is making it hard for insurers to estimate costs going forward, but from the consumer perspective, this is one of the best options you have to keep premiums down.
While many insurers have put in requests to raise premiums, a lot of marketplaces have new entrants that are offering competitive or below-market rates. That's why it's so important to shop the exchanges every open-enrollment period.
In addition, consumers should be willing to drop a "metal level" to save money, advised Dillon. According to his calculations, consumers can save approximately 15 percent in premium costs by shifting from gold to silver, or from silver to bronze plans. Such a drop will likely mean more out-of-pocket costs, so based on your health care needs, you'll have to calculate if the savings on premiums in exchange for higher out-of-pocket costs makes sense.
Know your options. Having a thorough knowledge of your exchange options can help you when it comes to applying for subsidies. Individual exchanges often change their "benchmark plans" -- those that qualify for government subsidies. If you stay in your plan from the previous year thinking it will still be the benchmark plan, but then the benchmark plan shifts to a different carrier, you may lose your subsidy.