Obamacare premiums to increase by double digits next year

Obamacare premiums are expected to rise — again.

Following a 7.2 percent uptick in 2016, premiums for the Affordable Care Act are expected to soar by an average of 22 percent in 2017, according to information released Monday by President Barack Obama’s administration.

News of the increase comes after several insurers began raising their prices and reducing their presence on healthcare.gov exchanges in an effort to make up for losses incurred by taking on unhealthy patients.

Photo credit: Shutterstock.com
Photo credit: Shutterstock.com

Before taxpayer-provided subsidies, premiums for a midlevel benchmark plan will increase an average of 25 percent across the 39 states served by the federally-run online market, the Department of Health and Human Services reported. Some states will see much bigger jumps, others less. Fox example, in Arizona, premiums for the benchmark plan will increase by 116 percent next year, from $196 to $422.

Moreover, about 1 in 5 consumers will only have plans from a single insurer to pick from, after major national carriers such as UnitedHealth Group, Humana and Aetna scaled back their roles.

“Consumers will be faced this year with not only big premium increases but also with a declining number of insurers participating, and that will lead to a tumultuous open enrollment period,” said Larry Levitt, who tracks the health care law for the nonpartisan Kaiser Family Foundation.

For many, though, there is at least some solace. According to the White House, roughly 85 percent of Obamacare enrollees will qualify for federal subsidies, which can bring premiums to less than 10 percent of their income. Of course, taking such subsidies will require consumers be willing to switch to cheaper plans with spottier coverage.

Obama administration officials claim 77 percent of consumers will be able to find a plan that costs less than $100 per month after subsidies.

“Relatively few people will feel the premium increases, but everyone will hear about them,” Dan Mendelson, president of Avalere Health, told CNN. “That will have an effect on the perception of the program.”

Dwindling choice is another problem factor.

The total number of HealthCare.gov insurers will drop from 232 this year to 167 in 2017, a loss of 28 percent. (Insurers are counted multiple times if they offer coverage in more than one state. So Aetna, for example, would count once in each state that it participated in.)

Switching insurers may not be simple for patients with chronic conditions.

While many carriers are offering a choice of plan designs, most use a single prescription formulary and physician network across all their products, Caroline Pearson, senior vice president of Avalere Health, explained. “So, enrollees may need to change doctors or drugs when they switch insurers,” she said.

Approximately 10.4 million people were enrolled in Obamacare plans as of June 30, the administration announced, and it is expecting to see the that number increase to 11.4 million in 2017.

The number of uninsured Americans has decreased to 8.6 percent, a record low.

The Associated Press contributed to this report.