A preliminary look at 2016 Obamacare shows that consumers on the federal health exchanges will have differing experiences.
The Obama administration has announced that the average benchmark premium rate increase for the coming year will be 7.5 percent for the 37 states using the federal HealthCare.gov platform, but rates vary widely from state to state.
“It shows that the landscape on premium increases is highly diverse this year,” says Drew Gonshorowski, a senior policy analyst at The Heritage Foundation.
“The [7.5 percent] hides that there is some bad news here,” Gonshorowski told The Daily Signal. “Very few people, or very few places in the exchanges, are actually seeing premium decreases, so far. A lot of the increases are pretty big.”
For instance, Oklahoma will see a nearly 36-percent increase in its premium rate.
Since 2005, premiums have grown at an average rate of 5 percent per year.
In the coming days, more information about the state of Obamacare is expected to be released. “We have to be vigilant about what our out-of-pocket costs are going to be,” Gonshorowski added.
The silver plans are the most popular on the Obamacare health exchanges, with about 70 percent of consumers enrolled. The silver plans pay for about 70 percent of health care costs, helping to reduce out-of-pocket charges.
A benchmark second-lowest-cost silver plan was used to analyze the data by the Department of Health and Human Services.
“For most consumers, premium increases for 2016 are in the single digits and they will be able to find plans for less than $100 a month,” Kevin Counihan, CEO of the Health Insurance Marketplaces, said in a statement.
According to HHS data, nearly 8 in 10 returning customers will be able to buy a plan for less than $100 per month after tax credits.
Tax credits help low- and middle-income households reduce their premium cost and typically phase out as income increases. The second-lowest-cost silver plan is used by the IRS to calculate advanced premium tax credits consumers may be eligible for.
In 2015 the average advanced premium tax credits for enrollees was $270 per month, with 80 percent of those on Obamacare receiving these subsidies.
“If consumers come back to the Marketplace and shop, they may be able to find a plan that saves them money and meets their health needs,” said Counihan. “Last year, over half of re-enrolling consumers on HealthCare.gov shopped and half of those who shopped selected a new plan.”
The open enrollment for 2016 federal health coverage starts on Nov. 1.
“The best thing people can do is, if they are on the exchanges, they can go and they can shop,” Gonshorowski advised. “And look at their own personal experience and make the decision that works the best for them.”