Obamacare 2016 Average Rate Hike 8 Percent

HealthcaredotgovWe are already anticipating double-digit premium hikes for Obamacare plans in 2017, based on insurance filings in a sufficient number of states to show the trend.

Obamacare’s defenders point out two limits to these leading indicators. First, they are requested, not approved rate hikes. Second, Obamacare beneficiaries can trade down. A person whose plan hikes premiums double digits can switch to a plan with a lesser increase. Both criticisms are fair.

Nevertheless, now that the dust has settled on 2016, and all the data on this year’s enrollment analyzed, we can confirm from two pro-Obamacare sources that premiums in Obamacare’s exchange plans increased by an average of eight percent from 2015 to 2016. General measures of price changes, such as Consumer Price Inflation, were effectively flat over the period. That is, the eight percent Obamacare premium hike was a real, not nominal, price hike.

In April, the Office of the Assistant Secretary for Planning and Evaluation of the U.S. Department of Health & Human Services reported:

Two-thirds (67 percent) of HealthCare.gov consumers selected a new plan in 2016: all new consumers, plus 43 percent of returning consumers. Taking into account shopping, the increase in the average premium was 8 percent between 2015 and 2016.

That almost half of returning beneficiaries switched plans to avoid double-digit premium hikes was a little higher rate of change than in 2015. Nevertheless, this high churn rate could only hold them down to an eight percent rate hike.

In a study published on May 24, the Urban Institute arrives at the same conclusion:

Now, with data available for all states, we find that the average change in premiums for the lowest-cost silver plan across all rating areas in all states increased a weighted average of 8.3 percent between 2015 and 2016.

The Urban Institute is a strong supporter of Obamacare. Unfortunately, this led it to bury this reality. The title of the study is Increases in 2016 Marketplace Nongroup Premiums: There is No Meaningful National Average, even though the study calculates a hike of 8.3 percent!

Further, the press release emphasizes “three in 10 Americans (29.1%) live in a region where the average premium for the lowest-cost silver plan declined from 2015 to 2016,” which is a roundabout way of saying that seven in 10 lived in regions where price hikes were the norm.

Obamacare’s champions are being forced to dig pretty deep to find good news.

Comments (8)

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  1. Ronald Greiner says:

    “Two-thirds (67 percent) of HealthCare.gov consumers selected a new plan in 2016:”

    PPOs will cost 20% more than an HMO that pays NOTHING when the consumer goes outside of their HMO’s skinny network. In 2016 all PPOs were eliminated in TEXAS, FLORIDA and many other states with Obamacare.

    The consumer didn’t “select” an HMO because that was their only choice. Not one Obamacare plan in TEXAS has MD Anderson Cancer Hospital as a provider so all cancer patients had to stop using their doctors.

    This story would have been better if it told the truth how consumers paid 8% more even when they switched from their PPO to an HMO and lost their doctors and hospitals.

    John, you should stop repeating the Socialists LIES to defend Obamacare. There are tons of stories today about 40% and more increases in premiums for 2017. In 2017 the government can’t take away PPOs because that has already been done.

    John you wrote, “Second, Obamacare beneficiaries can trade down. A person whose plan hikes premiums double digits can switch to a plan with a lesser increase. Both criticisms are fair.”

    Maybe you should say FORCED down instead of TRADE down. If you lost your PPO John on your employer-based plan you might care more. It’s crazy, all writers on Obamacare are always on an employer-based plan that they will lose if they get fired.

    Get original John and write about how HMOs kill people and stop defending Obamacare.

  2. Lee Benham says:

    I guess you can spin this year that Americas largest Health insurer UHC is not requesting a rate in crease while everyone else is asking for 35% plus. Now that’s a way to average 😫

  3. Allan (formally Al) says:

    “Obamacare’s champions are being forced to dig pretty deep to find good news.”

    Obamacare supporters have dug so low they have hit the sewage lines.

  4. Don Levit says:

    How can insurers have a sustainable business model if 43 percent of its clients switch to a competitor?
    I have read that insurers are competing more at the silver level where the subsidies are highest
    Does that mean bronze plans will be even more expensive?

    • I’ve read some carriers are dropping Bronze altogether for 2017, which I find interesting because that is where they would attract the healthy (which they want). Maybe they have been so skilled at structuring Silver plans they do not need Bronze to do that anymore.

      Remember when insurers were calling for Tin or Plastic or whatever plans, at actuarial values less than Bronze? We don’t here much of that anymore, which means they might not need it.

  5. Don Levit says:

    If the out of pocket limits for out of network care are not capped,assume an insurer caps it at $25,000
    Could they not offer a plan with a $25,000 deductible?

  6. Ellie Cardillo says:

    Great! Don’t forget to read my article as well. You will love it for sure 🙂