Insurers are raising the 2017 premiums for a popular and significant group of health plans sold through HealthCare.gov by an average of 25 percent, more than triple the increase for this year, according to new government figures.
The spike in average rates for the 38 states that rely on the federal marketplace created under the Affordable Care Act was announced by federal health officials on Monday. The figures serve broadly to confirm what has become evident piecemeal in recent months: Prompted by a burden of unexpectedly sick ACA customers, some insurers are dropping out while many remaining companies are struggling to cover their costs.
In disclosing the 2017 rates, officials played down the impact of higher prices on consumers. They said that more than eight in 10 consumers will qualify for ACA subsidies that will cushion them from sticker shock. And they noted that as premiums go up, more Americans will be eligible for the tax credits.
As in previous years, the officials stressed that, if current customers shop around, many will find coverage that is less expensive than what they have. With subsidies, more than three-quarters of customers will be able to find a health plan next year for which they pay $100 or less in monthly premiums, according to the new data. People who have ACA coverage tend to qualify for relatively large tax credits because their incomes tend to skew low.
The portrait of rates and availability of health plans in the law’s marketplaces has become an annual ritual since the exchanges began selling insurance during fall 2013. Next week, the marketplaces will open for their fourth sign-up season, and the Obama administration is predicting that 11.4 million people will pick health plans by the end of January – about 1 million more than the number of Americans with such coverage now.
The steep increase of 25 percent is the average for the health plans on which the ACA’s tax credits are based each year – the policy in each part of the country that has the second-lowest rate among plans offering a “silver” tier of coverage. In a conference call with reporters, two Department of Health and Human Services officials did not mention that percentage.
An accompanying HHS research brief containing the overall patterns and state-level data also shows that health plan options are dwindling, although almost all ACA shoppers will have some choice of plans for 2017.
Among the states relying on HealthCare.gov, the typical number of plans available is declining by more than one-third, from 47 to 30. Competition is falling in all but four of those states, though the decrease varies significantly. In Florida, the average marketplace customer will have three more plan choices than for this year. In Arizona, the number of plans will plummet from 65 to four.
And 21 percent of the customers shopping in the federal exchange will find only one insurance company, compared with 2 percent for 2016.
In a statement accompanying the new data, HHS Secretary Sylvia Mathews Burwell said that insurers are “continuing to adapt” to a new market in which they must compete for customers based on their price and quality, rather than freezing out people with medical conditions. Burwell said that premiums have been influenced by “efforts to undermine the ACA,” including a decision by the Republican-led Congress to block money intended to help buffer insurers with high-cost customers.