Obamacare rates will increase an average of 22% for Silver plans

Analysts have been warning for months that Obamacare insurance premiums are set to skyrocket given the lack of competitiveness brought about by big insurance companies leaving the marketplace. 

Yesterday, the administration admitted that the average cost of a Silver plan on the federal healthcare.gov exchange will rise 22%, with many states seeing a much higher increase.  The increase is triple what it was last year and will increase the cost of Obamacare by at least $136 billion over 2015, according to a score issued by the Congressional Budget Office earlier this year.

At that time, CBO estimated premium increases of 11% far short of the reality that faces consumers today.

That 22% increase reflects policies sold only on the federal exchange.  It does not include the 12 states that operate their own exchanges, where the increases, in some cases, are much higher.

The administration points out that most Americans will have the increase in premiums covered by an increase in subsidies paid by the government.  But 20% of Obamacare insureds will bear the full brunt of the increase.

Washington Times:

On Monday, the House Energy and Commerce Committee asked the Centers for Medicare and Medicaid Services to detail just how much of a burden taxpayers are shouldering.

“While the administration continues to focus on premium ‘affordability,’ it ignores the undeniable fact that federal taxpayers are subsidizing these premium increases through tax credits,” wrote Rep. Fred Upton, Michigan Republican and the panel’s chairman, along with other leading members. “The committee is concerned that the federal taxpayer continues to bear the burden of subsidizing the growing cost of health care insurance.”

Analysts for months had warned of massive premium increases, saying the Obamacare program is still struggling to entice healthy customers who are needed to make the economics work.

Minnesota Gov. Mark Dayton, a Democrat, recently said the law “is no longer affordable for an increasing number of people.” Tennessee Insurance Commissioner Julie McPeak said the state’s Obamacare exchange is “very near collapse.”

“The fact that premium increases in the ACA marketplaces are going to be substantially higher in 2017 has been known for months, so there’s no October surprise here,” said Larry Levitt, a senior vice president at the nonpartisan Kaiser Family Foundation. “The start of open enrollment just means that these increases are becoming more tangible for those consumers who are affected.”

Increases will vary widely from place to place, though some of the figures are eye-popping: In Arizona, a 27-year-old’s average monthly premium for the second-lowest silver, or “benchmark,” plan jumps $196 to $422, a 116 percent increase, before subsidies.

In Oklahoma, that same customer would get a 69 percent increase. Customers in Indiana and Massachusetts, which runs its own exchange, would be the only ones to see a decrease, of 3 percent, according to the HHS report.

The administration said things could get worse if the federal courts do not overturn a judge’s decision in May that sided with House Republicans, who say the Treasury is unlawfully reimbursing insurers for losses under the 2010 health care overhaul.

Recall in 2010 the CBO projecting Obamacare costs under $1 trillion over the next 10 years.  The latest CBO estimate is for Obamacare to cost $1.34 trillion over the next decade.  Subsidies have skyrocketed to $660 billion offset by taxes and fees paid by taxpayers and insurers. 

Even an Economics 101 student can see that the economics of Obamacare simply isn't working.  They overestimated the number of healthy "young invincibles" who would sign up and vastly underestimated the number of older, sicker consumers who would purchase premiums.  The resulting disastrous flood of red ink is driving insurers out of the marketplace.

It gets worse next year, as 1 in 5 consumers who purchase an Obamacare plan will have only one insurance company offering plans in their state.  That guarantees that premiums will continue to increase, enrollment will continue to fall, and the Obamacare death spiral will continue.

Analysts have been warning for months that Obamacare insurance premiums are set to skyrocket given the lack of competitiveness brought about by big insurance companies leaving the marketplace. 

Yesterday, the administration admitted that the average cost of a Silver plan on the federal healthcare.gov exchange will rise 22%, with many states seeing a much higher increase.  The increase is triple what it was last year and will increase the cost of Obamacare by at least $136 billion over 2015, according to a score issued by the Congressional Budget Office earlier this year.

At that time, CBO estimated premium increases of 11% far short of the reality that faces consumers today.

That 22% increase reflects policies sold only on the federal exchange.  It does not include the 12 states that operate their own exchanges, where the increases, in some cases, are much higher.

The administration points out that most Americans will have the increase in premiums covered by an increase in subsidies paid by the government.  But 20% of Obamacare insureds will bear the full brunt of the increase.

Washington Times:

On Monday, the House Energy and Commerce Committee asked the Centers for Medicare and Medicaid Services to detail just how much of a burden taxpayers are shouldering.

“While the administration continues to focus on premium ‘affordability,’ it ignores the undeniable fact that federal taxpayers are subsidizing these premium increases through tax credits,” wrote Rep. Fred Upton, Michigan Republican and the panel’s chairman, along with other leading members. “The committee is concerned that the federal taxpayer continues to bear the burden of subsidizing the growing cost of health care insurance.”

Analysts for months had warned of massive premium increases, saying the Obamacare program is still struggling to entice healthy customers who are needed to make the economics work.

Minnesota Gov. Mark Dayton, a Democrat, recently said the law “is no longer affordable for an increasing number of people.” Tennessee Insurance Commissioner Julie McPeak said the state’s Obamacare exchange is “very near collapse.”

“The fact that premium increases in the ACA marketplaces are going to be substantially higher in 2017 has been known for months, so there’s no October surprise here,” said Larry Levitt, a senior vice president at the nonpartisan Kaiser Family Foundation. “The start of open enrollment just means that these increases are becoming more tangible for those consumers who are affected.”

Increases will vary widely from place to place, though some of the figures are eye-popping: In Arizona, a 27-year-old’s average monthly premium for the second-lowest silver, or “benchmark,” plan jumps $196 to $422, a 116 percent increase, before subsidies.

In Oklahoma, that same customer would get a 69 percent increase. Customers in Indiana and Massachusetts, which runs its own exchange, would be the only ones to see a decrease, of 3 percent, according to the HHS report.

The administration said things could get worse if the federal courts do not overturn a judge’s decision in May that sided with House Republicans, who say the Treasury is unlawfully reimbursing insurers for losses under the 2010 health care overhaul.

Recall in 2010 the CBO projecting Obamacare costs under $1 trillion over the next 10 years.  The latest CBO estimate is for Obamacare to cost $1.34 trillion over the next decade.  Subsidies have skyrocketed to $660 billion offset by taxes and fees paid by taxpayers and insurers. 

Even an Economics 101 student can see that the economics of Obamacare simply isn't working.  They overestimated the number of healthy "young invincibles" who would sign up and vastly underestimated the number of older, sicker consumers who would purchase premiums.  The resulting disastrous flood of red ink is driving insurers out of the marketplace.

It gets worse next year, as 1 in 5 consumers who purchase an Obamacare plan will have only one insurance company offering plans in their state.  That guarantees that premiums will continue to increase, enrollment will continue to fall, and the Obamacare death spiral will continue.