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What you may not be reading about proposed Obamacare premiums

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Illinois

On Monday, Illinois citizens were jolted by a piercing pain in the wallet as federal officials unveiled proposed Obamacare insurance premium rates for 2017. Insurers plan to dial up rates as much as a heart-stopping 45 percent for those who buy plans on the Obamacare marketplace when open enrollment starts Nov. 1.

That means thousands of people will scramble for affordable insurance … and won’t find it.

* From the US Department of Health & Human Services…

Statement by Press Secretary Jonathan Gold on Illinois health insurance rate changes:

“Consumers in Illinois will continue to have affordable coverage options in 2017. Last year, the average monthly premium for people with HealthCare.gov coverage getting tax credits increased just $4 from $102 to $106 per month, despite headlines suggesting double digit increases. People in Illinois understand how the Marketplace works, and they know that they can shop around and find coverage that fits their needs and budget. In fact, last year more than 53 percent of them did exactly that by switching plans to save money. In addition, the vast majority of consumers in Illinois qualify for tax credits that reduce the cost of coverage below the sticker price. Today’s announcement is just the beginning of the rates process, and consumers will have the final word when they vote with their feet during Open Enrollment.”

Background

Proposed rates aren’t what consumers pay. While today’s filings show an average rate increase in Illinois, a report from the U.S. Department of Health and Human Services demonstrates that proposed premium changes from preliminary rate filings do not capture what Marketplace consumers actually pay. Last year, the average monthly premium for people with HealthCare.gov coverage getting tax credits increased just $4 from $102 to $106 per month, despite headlines suggesting double digit increases.

Most people receive tax credits and can buy a plan for less than $75 per month.

75% of Marketplace consumers in Illinois receive tax credits, which are designed to protect consumers from premium increases and help make coverage affordable.

Tax credits increase if the cost of the second lowest-cost silver, or benchmark, plan goes up. So if all premiums in a market go up by similar amounts, 75% of Marketplace consumers in that market will not necessarily pay more because their tax credits will go up to compensate. Average rate increases reported with the preliminary rate filings do not account for tax credits.

For 2016 coverage, 53% of customers in Illinois had the option of selecting a plan with a premium of $75 or less per month after tax credits.

Shopping: The ACA Marketplace helps consumers shop around for the best deal.

Prior to the ACA, it was nearly impossible for consumers to compare plans and shop around easily – and many Americans went uninsured because they couldn’t afford insurance or had pre-existing conditions. Those who did have insurance in the individual market were often trapped in the plan they had, since people with even small health problems could be denied coverage or charged an exorbitant price if they tried to switch plans or issuers.

Today, Marketplace consumers in Illinois can purchase any available plan regardless of health conditions, and tools such as the doctor lookup and out-of-pocket cost calculator help them find the plan that meets their needs. Last year, 53% of returning Marketplace consumers in Illinois switched plans. They saved an average of $636 annually.

Based on an examination of preliminary 2017 rate filings for nine states that released rates earlier this year, Avalere found that the average rate increase for lowest and second-lowest cost silver plans was 7-8%, about half the overall average rate increase in these states. That difference highlights how consumers can benefit from shopping around.

A major new issuer, Cigna, has indicated it will begin offering plans in the Chicago area for 2017, which will further bolster choice and competition in the Illinois Marketplace.

Prior to the Affordable Care Act, plans were typically inferior and excluded services like maternity care, or even routine services like prescription drugs. Plans also often charged a higher premium, or denied coverage altogether, to consumers due to a pre-existing condition. Now, all consumers have the option to purchase quality, affordable coverage.

This is a big deal for as many as 5,636,000 people in Illinois with a pre-existing condition.

Preliminary rates aren’t final rates. Preliminary rates often change significantly before being finalized. In particular, they are subject to rate review, which led to $1.5 billion in savings for consumers in 2015. Last year, final rates in some states were below proposed rates.

Health insurance is clearly something people in Illinois like, want, and need: 388,179 people signed up for 2016 coverage through the Marketplace.

Since major provisions of the Affordable Care Act went into effect, Illinois’ uninsured rate fell from 14.2 percent in 2013 to 7.9 percent in 2015 for non-elderly residents, according to new data released recently.

Both Marketplace and non-Marketplace consumers continue to benefit from the low health care cost growth of recent years.

Marketplace rates remain well below expectations when the law was passed. Marketplace rates for 2014 came in about 15% below Congressional Budget Office (CBO) projections in 2010. Better-than-expected Marketplace premiums are due in large part to lower-than-expected economy-wide health care cost growth and other efficiencies.

For the half of Americans who obtain health insurance through an employer, premiums for family coverage grew by an average of 5% per year from 2010 to 2015 – compared with about 8% per year from 2000 to 2010. Premiums grew at an even slower 4.2% rate in 2015. If premium growth since 2010 had matched the average growth rate over the prior ten years, the average family premium would have been almost $2,600 higher in 2015.

All emphasis was in the original.

posted by Rich Miller
Thursday, Aug 4, 16 @ 11:46 am

Comments

Thanks Rich, very few journalists go the extra step to point this out. Requested hikes =/= implemented hikes. All of this is subject to approval. ACAsignups.net does a good job of tracking all this nationally. Last year the average enacted hike in the US was between 11-14%. This year is shaping up similarly

Comment by JohnnyPyleDriver Thursday, Aug 4, 16 @ 11:51 am
=== - JohnnyPyleDriver - Thursday, Aug 4, 16 @ 11:51 am:

Last year the average enacted hike in the US was between 11-14%. This year is shaping up similarly ===

Is that a good thing?

Comment by Birdseed Thursday, Aug 4, 16 @ 11:58 am
“When there’s a conflict between partisan belief and plain evidence, it’s the beliefs that win.” — Marty Kaplan

Comment by anon Thursday, Aug 4, 16 @ 12:00 pm
What motivation would the Tribune have to mis-inform its readers on a subject so important to so many families?

Oh, right. Nevermind.

Comment by 47th Ward Thursday, Aug 4, 16 @ 12:10 pm
Imagine that, Obama lied!!!

Comment by Anonymous Thursday, Aug 4, 16 @ 12:10 pm
==Is that a good thing?==

not really a judgement thing, just pointing out that requested rates aren’t enacted rates. The enacted rates are certainly better than the requested rates. And the hikes of the past 7 years seem to be much smaller than the hikes prior to that, and we’re covering more people. Plus, the hikes are smaller or nonexistent for a majority of the people that shop around every year.

Comment by JohnnyPyleDriver Thursday, Aug 4, 16 @ 12:11 pm
All of this might be well and good unless, like my family, you don’t qualify. My insurance started at slightly under 400 and will probably be over $1200 after this hike. Combine that with a 10,000 deductible and I could pay almost 25% of income for healthcare. This is not good!

Comment by ANON Thursday, Aug 4, 16 @ 12:13 pm
Do you know one of the biggest tax breaks in this country?

The the premiums paid by companies that offer health insurance exempt from payroll taxes.

Why? In our so-called modern society, what does a full time (mostly, but some part time) jobs have to do with having health insurance?

You’d think True Conservatives would be all over this. Ending a Government Entitlement Program. Freedom and Liberty for the individual to buy their own insurance. No wait, ObamaCare aka RommneyCare was a Republican idea!

The Affordable Care Act is a good thing and needs to be supported, and the Corporate Welfare for employer provided health insurance ended.

Comment by Doug Simpson Thursday, Aug 4, 16 @ 12:23 pm
Deductibles, let’s not forget the deductibles. The Dem’s always crow about how many people now have healthcare; but is is actually affordable ? Perhaps not when average deductibles of $3,000 to $5,600 are out of reach for most families.

http://www.nationalreview.com/article/433940/obamacare-deductibles-are-skyrocketing-affordable-care-act-health-insurance-anything

Comment by Susan B. Anthony Thursday, Aug 4, 16 @ 12:25 pm
When employers pay for health insurance for their employees, a great burden is removed from the federal government. It is far cheaper for the government to offer a tax break to employers than to assume the costs avoided by employer provided health care.

Of course if your goal is to force the employees to accept the crappy ACA insurance that is another thing.

Comment by Plutocrat03 Thursday, Aug 4, 16 @ 12:32 pm
Great post, Rich, very informative.

Comment by Illinoised Thursday, Aug 4, 16 @ 12:33 pm
Thanks also Rich for providing a fuller view of the ACA in Illinois and in general.

Shopping around is key. Last year I helped someone shop, and we found a silver plan with good prices. In the past few years we also found plans with good prices.

Comment by Grandson of Man Thursday, Aug 4, 16 @ 12:38 pm
=== - Doug Simpson - Thursday, Aug 4, 16 @ 12:23 pm:

In our so-called modern society, what does a full time (mostly, but some part time) jobs have to do with having health insurance? ===

Great question for our public sector union posters here.

Also, if you support including the costs in payroll taxes, do you support employees paying income tax on the benefits received?

Comment by Cadillac Thursday, Aug 4, 16 @ 12:44 pm
===but is is actually affordable ? Perhaps not when average deductibles===

Do you know what’s definitely not affordable? Having no insurance and getting cancer or having a heart attack.

There’s an economic reality here. If you want to argue for “free” health insurance, do so. If you want a federalized health insurance system that cuts out private companies, do so. If you want a marketplace, you gotta pay for it.

Comment by Rich Miller Thursday, Aug 4, 16 @ 12:44 pm
Great details in this post. Another side of the issue not discussed is level of service and qualifications. While the plans may seem affordable, they are basically for major medical coverage, and come with massive deductible and co pay limits.

Comment by allknowingmasterofracoondom Thursday, Aug 4, 16 @ 12:52 pm
With due respect to Mr. Gold who has a job to do, it’s a very complicated system, and for many it has become expensive enough to cause people in their 20s (immortal as they are!) to simply quit carrying it. There is little in the way of punishment for not enrolling…still.

It’s especially grading on parents whose children have just passed the age of eligibility to be covered on the family plan. This insurance remains very complicated to access and not inexpensive at all. And it’s going up.

Comment by A guy Thursday, Aug 4, 16 @ 1:08 pm
Thank God for Obamacare.

I was denied the ability to buy private health insurance coverage for a bogus pre-existing condition reason in 2012 but have been able to buy individual policies since the exchange came online. I will never support federal Republicans for any office until they start to admit the good this program has done for people and work with Democrats instead against them to make the health system better.

Sure, the system is annoying and frustrating at times like all health insurance programs, but despite getting zero subsidies my monthly premium for a BCBS gold plan with a reasonable deductible is still less than I paid in monthly premiums under COBRA for a BCBS plan in 2008!

Perhaps my experience is an anamoly but it seems like only rarely are there positive stories about the ACA yet I am proof they are out there.

Comment by hisgirlfriday Thursday, Aug 4, 16 @ 1:28 pm
== my monthly premium for a BCBS gold plan with a reasonable deductible is still less than I paid in monthly premiums under COBRA===

I’m certain that’s true. COBRA is often unaffordable for people and you have few options to lower it, if any. That isn’t the best comparison out there, but the existing condition probably made it your only choice.

I’m glad someone is seeing a benefit. I really am.

Comment by A guy Thursday, Aug 4, 16 @ 1:43 pm
I agree with Rich.

I retired early and bought private health insurance for several years. I had a $5,000 deductible to make premiums affordable. When I was on Obamacare, I still had that $5,000 deductible, but my premiums were cut by about half. Sure, they went up every year, but most insurance does.

Now I’m on Medicare, with a supplement plan.

Obamacare is far from perfect, but it was a big help to me when I needed it.

Comment by Streator Curmudgeon Thursday, Aug 4, 16 @ 2:03 pm
Rich- what about the 22 percent that don’t get subsidies. Also- the crazy way the program works- if your income is one dollar above the cutoff- you get zilch. No way to dress this up - the ACA other then for Medicaid recipients ain’t working. It’s crash and burn if Aetna and BC pull the plug. This is exactly what adverse selection looks like and it is not oretty

Comment by Sue Thursday, Aug 4, 16 @ 2:19 pm
The 2 biggest boondoggles of the Obama administration are Obamacare and high speed rail.

And, they are whoppers!!

Comment by Anonymous Thursday, Aug 4, 16 @ 2:26 pm
Reading this post it dawned on me- the ACA exchanges are not working. The insurers are all losing money on the population participating. Since the insurers are seemingly disinterested- why not just transfer the non-Medicaid ACA population into Medicare and charge premiums based on income?

Comment by Sue Thursday, Aug 4, 16 @ 2:38 pm
The thing that annoys me about those who oppose the ACA (and there are plenty of flaws) are that they have no alternative. People need to be insured and it shouldn’t cost them an arm and a leg to be insured. If the ACA isn’t the way to do it then what is? Everyone should be working on finding a better way to do it (if the ACA isn’t it) instead of simply saying we have to kill it.

Comment by Demoralized Thursday, Aug 4, 16 @ 2:44 pm
Anyone else notice how conservatives are pivoting away from “Obamacare” back to “ACA”? Did Frank Luntz send out a memo?

– MrJM

Comment by @MisterJayEm Thursday, Aug 4, 16 @ 2:46 pm
A lot of money could be saved if insurance companies were cut out of the equation.

patient/client:provider. that’s it. fixed it.

Why should there be enough billions in cash on hand at a health insurance company to pay cash to buy out their competitor? I believe the five big players have consolidated to three, both cash deals.

For profit decisions made by deciding who lives or dies. This is not a moral action.

Why do Americans pay twice as much for healthcare with poorer outcomes? Right here the answer lies, baby.

Thank goodness there are interests looking at this approach.

Comment by cdog Thursday, Aug 4, 16 @ 3:24 pm
sue @2:38

We Agree!!!!

Comment by cdog Thursday, Aug 4, 16 @ 3:26 pm
Why do my premiums and tax dollars pay Big Pharmaceutical companies who then advertise their ridiculous remedy du jour on the TV?

What a waste of resources.

Comment by cdog Thursday, Aug 4, 16 @ 3:34 pm
Who made the rule that health care was a piece by piece gig?

Every stitch, every bandaid, every conversation, run through a third party.

It should be one price and a whole bunch of doctoring is included. I would gladly give my local hospital and doctor network my $1000/month for two, to have cradle to grave care.

Can you imagine if your daycare provider charged you by the diaper, wipe, cookie? All run through a third party that took a cut?

I have seen so many unjust things changed by smart, effective, inspired people. I will hope this too will be corrected in my life time.

Comment by cdog Thursday, Aug 4, 16 @ 4:17 pm
The free market, and insurance, don’t play well together in the real world.

Comment by walker Thursday, Aug 4, 16 @ 5:22 pm
“Proposed rates aren’t what consumers pay”.

So are these premiums a lie?

If so, call it out.

If not who will pay for them?

Comment by Federalist Thursday, Aug 4, 16 @ 5:56 pm
Those $100/month plans are not even real insurance. The truth is, the premiums and deductibles are outrageous for decent coverage. Obamacare has been a huge disappointment.

Comment by Supreme Allied Commander Thursday, Aug 4, 16 @ 6:30 pm
Since we don’t qualify for any subsidies, we are paying for others to have them. My insurance premium (silver plan) is 5 times the cost of insurance held by a family member’s insurance plan that we had for years. We are having financial difficulties paying the premiums and costs of Obamacare but there is no help for us. This has been the straw that has broken the camel’s back and changed lifelong Dems into Republicans. Enough!

Comment by Anonymous Thursday, Aug 4, 16 @ 6:36 pm
Insurance broker told me that while my premiums were going up 50% (for this year, 2016) on my silver plan, she had just had a couple in who qualified for subsidies and had gold plans.Their premium was $50/month.

While I understand this is an attempt to help those low income folks with insurance, they should not have higher quality insurance than someone who can barely pay their premium which is more than $600 more/month and a lesser plan. They should be in bronze plans!

Comment by Anonymous Thursday, Aug 4, 16 @ 6:40 pm