Premiums for individual plans offered by the dominant local insurers are rising almost everywhere for 2016, typically by double-digit percentage increases, according to a Wall Street Journal analysis of plan data in 34 states where the HealthCare.gov site sells insurance. More than half of the midrange “silver” plans are boosting the out-of-pocket costs enrollees must pay, while more than 80% of the less-expensive “bronze” plans are doing so.
A new analysis by Avalere finds that causes of health insurance premium increases in 2016 generally mirror the distribution of healthcare spending in the individual and small group market. Specifically, inpatient and outpatient hospital services are modestly driving premium increases, while physician and other professionals make up less than their expected portion of premium growth. Prescription drugs’ contribution to 2016 premium increases is roughly in line with their costs in 2014. Overall, premiums for 2016 will rise an average of $25.26 per month, with $5.44 of that increase caused by outpatient hospital services
Analysis of 2016 Premium Changes in the Affordable Care Act’s Health Insurance Marketplaces | The Henry J. Kaiser Family FoundationOctober 28, 2015
The table below presents an update to our previous analysis of 2016 changes in premiums for the second-lowest cost (“benchmark”) silver marketplace plans in major cities in the 49 states and the District of Columbia, where we were able to find complete data on rates.Among these major cities, the percent change from last year in the benchmark premium ranges from -10.6% in Seattle, Washington to 38.4% in Nashville, TN. The simple average of these rate changes is 10.1% before accounting for the premium tax credit.For a 40 year old making $30,000 per year, the average change after tax credits would be -0.2% (holding age and income constant)
The state already is near the bottom when it comes to the percentage of the subsidy-eligible individuals who are enrolled via HealthCare.gov — just 38%. Now Mississippi’s subsidized premiums are about to jump far more than any of the 36 other states using HealthCare.gov.For 30-year-olds in Yazoo City earning about $25,000 (214% of the poverty level), the after-subsidy cost of the cheapest bronze plan will spike by $554, or 60%, in 2016.
The largest U.S. for-profit hospital chain said it admitted more uninsured patients in the third quarter who had previously registered with health insurance, compared with a year ago. They included people who bought coverage from marketplaces set up under President Barack Obama’s Affordable Care Act, but then dropped it.”We believe this is likely due to non-payment of premiums,” HCA Chief Financial Officer Bill Rutherford said on the company’s earnings call.
Quite candidly, anybody dumb enough to take the government money under these circumstances wasn’t going to be smart enough to pull it off.Let me also suggest that these struggling Obamacare co-ops are tantamount to the canaries in the Obamacare coal mine.These plans are exclusively in the business of the Obamacare insurance exchanges. If you want to segregate the Obamacare insurance business model from the overall insurance business to examine it, the co-ops are pure Obamacare.Just how well have all of the co-ops done?As the Washington Post recently reported, of the 23 Obamacare insurance co-ops in business on June 30, 2015, each of them charted in the article, 20 of them were losing money–most of these relatively tiny insurance start-ups showed staggering losses in the range of $4,000,000 to $50,000,000!
But it is possible to predict that the slow death of Obamacare has become more likely. Most obviously, any premium increases within the exchanges can lead potential and current enrollees to direct their healthcare dollars elsewhere, perhaps by doing without any insurance at all or by signing up for Medicaid. Ironically, it will be hard to win these defectors back with advertisement or improvements in plan coverage, because these options are tightly constrained by Obamacare, which by design limits competition only to the choice of various care levels. Ordinary markets allow for innovation on all dimensions of service, and thus have a resilience that is all too lacking in Obamacare.