Feds: Most states to see steep ObamaCare rate hikes

by Sarah Ferris - 10/24/16 5:03 PM ET

The price of the most popular plan under ObamaCare will increase by an average of 25 percent on the federal marketplace next year, according to data released Monday.

This year’s increase — which is more than triple that of last year’s — is the sharpest jump yet since the launch of HealthCare.gov.

{mosads} The premium hikes will directly hit the 16 percent of people with ObamaCare plans who do not currently receive subsidies. The rest will be shielded from most or all of those price increases by ObamaCare subsidies, which increase alongside the rising premiums.

About 260,000 people could also become newly eligible for those subsidies, the administration said. About 22 percent of the 1.3 million people who currently buy ObamaCare plans without subsidies could qualify for subsidies next year.

Rates will vary widely by state, with steeper price hikes in rural areas like Arizona, which is facing a 116 percent. Indiana, however, will see a 3 percent decline.

Despite the headlines, about 7 in 10 people will have ObamaCare plans available that cost $75 or less per month, according to the administration’s new report on the 2017 marketplace. The report includes data from the 38 states relying on HealthCare.gov.

In a call with reporters on Monday, officials with the Obama administration stressed that the new numbers don’t reflect what most people will end up paying.

“We think [consumers] will ultimately be surprised by the affordability of the product,” said Kevin Griffis, assistant secretary for public affairs for the Department of Health and Human Services (HHS).

Griffis said most people on ObamaCare will see below-average increases, pointing to the median premium increase of 16 percent across plans — far lower than the 25 percent average.

Some states, such as New Hampshire and New Jersey, will see premium increases of 5 percent or less. The nation’s largest marketplace, California, is reporting just a 7 percent increase. That figure is not included in the federal marketplace average because the state runs its own marketplace, however.

Still, the price increases for some ObamaCare marketplaces are likely to become new fuel for the GOP’s attack against the healthcare law in the final two weeks before Election Day.

The White House’s report was released the same day as data from the Kaiser Family Foundation, which found that the cost of a benchmark plan will rise 145 percent in Phoenix, Ariz., to $507 per month for an average 40-year-old person.

That same plan will increase 71 percent in Birmingham, Ala., and Oklahoma City, Okla.

In other parts of the country, however, the cost of premiums is actually decreasing for people on the ObamaCare exchanges — even without subsidies.

Kaiser found that unsubsidized premiums in Providence, R.I., will drop 14 percent, to $286 per month, for a 40-year-old person. Indianapolis will see a 4 percent decline, and Cleveland will see a 2 percent drop.

Overall, the administration said this year’s premium increases will more closely match what the Congressional Budget Office (CBO) had initially estimated under the law.

“With these adjustments, premiums will end up roughly in line with the initial CBO projections,” Griffis said.

Republicans have fought back against that line, arguing that the 2010 projections also included far more people enrolling in the marketplaces to help offset the cost of the extra subsidies. About 10.4 million people were enrolled as of earlier this year, about half of the 21 million people initially projected to sign up by the CBO.

Switching plans could also save ObamaCare customers money, according to the report.

ObamaCare customers receive subsidies based on the second-lowest-cost silver plan available, and because that benchmark can change, they are encouraged to manually check for cheaper plans in their tier each enrollment period.

If every customer signed up for their cheapest option, the average premium would be about 20 percent less, the report states.

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