Millions to Face Obamacare Sticker Shock in 2016

1. HHS released rate filings in which insurers requested double-digit premium increases for 676 individual and small group plans.
2. More than six million people are enrolled in individual market plans that are seeking average rate increases of 10 percent or more. The weighted average premium increase is 21 percent.

By May 15, insurers had to file 2016 premiums with their state regulatory agencies and provide an explanation for rate increases exceeding 10 percent. On June 1, the Department of Health and Human Services released this information for 41 states plus the District of Columbia. Based on these filings, it appears that premiums for many Obamacare plans, particularly those with large market share, will rise substantially next year. In these states insurers requested double-digit increases for 676 individual and small group plans. These are on top of individual-market premium increases averaging 49 percent between 2013 and 2014.

According to the Centers for Medicare and Medicaid Services, these states include 7.9 million total exchange enrollees – nearly four out of every five people enrolled in exchange plans across the country. The double-digit rate increases HHS reported affect more than six million people in these states. These increases apply for Obamacare plans sold on exchanges as well as Obamacare plans sold off the exchanges. The weighted average premium increase for these six million people is 21 percent. Because the HHS list does not include insurers requesting double-digit rate hikes in large states such as California and New York, final numbers will be even higher.

Obamacare plans have disproportionately attracted older and sicker people. In their rate request filings, insurance companies generally said that claims have been far above what they expected. Moreover, Obamacare contained a large subsidy for insurers through the law’s reinsurance program – equaling $20 billion over three years. The reinsurance program is rapidly phasing out. The combination of these factors means premiums may continue to spiral upward as healthier people choose not to buy the mandate-laden, high-deductible, and expensive coverage.

President Obama promised that premiums would go down because of his law. That has not happened. These price hikes are taking place across the country, the amounts are staggering, and they affect enormous numbers of hard-working Americans.

Methodology

Information is largely based on data released by HHS, although it is supplemented with additional available information that was missing from certain insurer filings. Insurers reported the information in different formats. Blue Cross Blue Shield plans generally reported a weighted average rate increase across all their Obamacare plans – both on exchange and off exchange – sold in each state. Most other insurers did not provide the information in this format, so the table shows their rate requests by plan.

Plans offered by Time Insurance Company are technically new, but the rates they submitted show the increase relative to their existing 2015 plan offerings that they are not renewing. According to Time, “Existing metallic customers will be discontinued from their current contract and moved to this new contract upon their plan year beginning on 1/1/2016.”

Since there are significantly more premium increases above 21 percent for plans that did not reveal a number of people enrolled, the overall average premium increase is likely more than 21 percent.

* Indicates that the information was obtained by some source other than the HealthCare.gov data release.