May 24, 2016

Obamacare Sticker Shock for 2017


  • Insurance companies continue to release their planned premiums for next year, with many requesting price hikes of 20, 30, or 40 percent.

  • Other companies are dropping out of the marketplaces entirely or raising deductibles so high that the coverage is useless.

  • Two-thirds of Americans say they would have difficulty coming up with the money to cover a $1,000 emergency, and some silver plan deductibles have now risen above $7,000.


Health insurers have submitted their requests for double-digit premium increases in the Obamacare exchanges next year. Even the administration’s former point person for the health care law is conceding that American families could face sticker shock. Marilyn Tavenner, once the head of the Centers for Medicare and Medicaid Services, predicted in an interview with Morning Consult last month that for 2017 “the overall trend is going to be higher than we saw in previous years.” 

Big rate increases planned for 2017

Health care premium increases united states

Families facing steep price hikes may be the lucky ones. Many Americans are being told they cannot renew their policy at any price. Humana is planning to abandon the Obamacare markets in at least two states, and UnitedHealth will leave Obamacare exchanges in all but a handful of states. According to the Kaiser Family Foundation, there are more than 650 counties across the country where families will have only one choice for insurance in the exchanges next year. This accounts for entire states, including Alaska, Alabama, and Wyoming.

Additional rate increases and departures are likely. A recent survey by McKinsey & Company found that only 25 percent of health insurance carriers were profitable in the exchanges last year. Some businesses, like Centene, are making money in the exchanges by focusing on the poorest people, who get the largest government subsidies. The companies are following the same business model they use on their Medicaid plans, with narrow networks of doctors and hospitals.

According to an Associated Press poll released last week, two-thirds of Americans would have difficulty coming up with the money to cover a $1,000 emergency. Many of the profitable companies in the exchanges survive by setting deductibles so high that the insurance is all but useless for many people. Centene intends to offer a silver plan next year that requires customers to meet a $7,050 deductible before it would start paying benefits. Blue Cross of Idaho will offer a silver plan with a deductible of $6,850. These policies are fundamentally no different from what the Obama administration used to call “junk” insurance.

CALIFORNIA

The health insurance exchange in California – touted by Obamacare advocates as a shining example of how well Obamacare works – is estimating that premiums may rise by an average of 8 percent next year. Insurers are blaming the end of Obamacare’s risk mitigation programs. These programs were only intended to help the health care law get off the ground – not to be permanent life support.

FLORIDA

In Florida, 15 health insurers are requesting rate increases for Obamacare individual plans that average 17.7 percent. Another 15 companies have asked for increases averaging 9.6 percent for small group plans.

IOWA

Wellmark Blue Cross Blue Shield sent letters to 30,000 customers in Iowa saying that it plans to raise premiums by 38 to 43 percent next year. Wellmark serves about 75 percent of the individual policies in Iowa’s health insurance market. The company attributed the rate increase request to the poor health of its subscribers and increasing medical costs. The company said it spent $1.27 for every dollar in premiums it collected last year for these customers. Another smaller health insurance carrier in the state, Medica, is requesting a rate increase of close to 20 percent on individual plans.

MAINE

The Maine Bureau of Insurance posted insurer rate requests earlier this month. Rate hikes range from 14 to 22 percent. The state’s co-op, Maine Community Health Options, is requesting an increase of 22.8 percent, Harvard Pilgrim is requesting an increase of 18.7 percent, Aetna 14.2 percent, and Anthem Blue Cross Blue Shield a 14.1 percent increase.

MARYLAND

For this year, state regulators granted CareFirst Blue Cross Blue Shield rate increases of 26 percent. Now CareFirst is requesting an additional 16 percent increase for two of its plans next year. Cigna Health and Life Insurance Company requested a 29.8 percent increase, and Kaiser Foundation Health Plan of the Mid-Atlantic States requested a 25 percent increase.

NEW HAMPSHIRE

Minuteman Health, New Hampshire’s lowest-cost health plan – and its second largest exchange participant – requested a 45.2 percent premium hike.

NEW MEXICO

New Mexico Health Connections is planning rate increases averaging more than 30 percent and as high as 34 percent for some plans. Presbyterian Health Plan also wants to raise rates an average of around 30 percent. Blue Cross Blue Shield of New Mexico dropped out of the state exchange for 2016 when its rate requests were denied, but now says it may return for next year. If it does, it wants to raise premiums by up to 83 percent compared to what it charged last year.

NEW YORK

The New York Department of Financial Services has said that the average requested increase for all plans in state’s individual market is 17.3 percent. United Healthcare of New York is asking for 45.6 percent more in 2017. Empire Health Choice has requested a rate boost of 25.3 percent, affecting 64,000 people in the state. North Shore-LIJ CareConnect is asking people to pay 29.2 percent more next year.

OREGON

Providence Health, the largest individual market insurer in Oregon, requested an average 29.6 percent rate hike for its plans in 2017. Providence attributes its request to the end of Obamacare's reinsurance program, as well as experience with its new risk pool – enrollees have poorer health than expected. Moda Health, Oregon’s second-biggest insurer, is proposing a 32.3 percent premium increase. Oregon’s Health Co-Op is also asking for rate increases of 32 percent.

TENNESSEE

Blue Cross Blue Shield of Tennessee, the state’s largest insurer, lost $311 million on Obamacare plans in its first two years. Though it has raised premiums by more than 60 percent since the law went into effect, the insurer continues to lose money. The plan reportedly may request a rate increase this year even higher than the 36.3 percent the state allowed last year.

VERMONT

Blue Cross Blue Shield and MVP in Vermont are requesting rate hikes of more than 8 percent for next year. Blue Cross cited increasing costs for medical care and prescription drugs, as well as higher utilization of health care services.

VIRGINIA

CareFirst Blue Cross Blue Shield in Virginia has proposed average increases of around 25 percent. Anthem HealthKeepers is seeking an average 15.8 percent rate increase, Innovation Health a 16.6 percent increase, and United Health a 9.4 percent rate increase.

WASHINGTON

In Washington state, insurers requested an average rate increase of 13.5 percent. Premera requested a 20 percent increase, Community Health Plan 11.3 percent, Bridegspan an increase of 10.5 percent, and Lifewise an increase of 10.9 percent.

Issue Tag: Health Care