According to the Congressional Budget Office (CBO) report released recently, the premium for the benchmark Obamacare silver plan is projected to jump an average of 15% in 2019, with many states having an even higher rate increased as reported by CNN.
Many health insurance companies have requested large insurance rate hikes, with many indicating the steps taken by President Donald Trump and Republicans in Congress as the core reasons.
Many insurers cite two key drivers of the increases: Congress’ elimination of the penalty for the individual mandate — which requires nearly all Americans to have coverage or pay up — and the Trump administration’s expected expansion of two types of health plans that don’t have to adhere to Obamacare’s regulations.
Jettisoning the individual mandate penalty is expected to cause premiums to rise by about 10%, the industry group said, citing reports by the Congressional Budget Office and independent actuaries. That’s because younger and healthier people will be more likely to forgo insurance since they will no longer have to pay a penalty. Insurers fear they will then be left with sicker and older policyholders, prompting them to request higher rates to cover the anticipated increase in claims.
New York insurers want to hike rates by 24%, on average, while carriers in Washington are looking for a 19% average premium increase. In Maryland, CareFirst is asking for an average 18.5% rate bump for its HMO plans and a 91% spike for its PPO policies (which have far fewer enrollees), while Kaiser Permanente wants to boost premiums by more than 37%, on average.
Insurers in remaining states will file proposed rates in coming weeks. Regulators will review the requests and could change them significantly. Premiums will be finalized in September and open enrollment starts November 1.
There are some bright spots in the 2019 Obamacare landscape. Insurers in some states, such as Pennsylvania and Vermont, have requested relatively modest increases. In the Keystone State, insurers are asking for a boost of 4.9% on average. Meanwhile, BlueCross BlueShield of Vermont and MVP Health Care are asking for 7.5% and 10.9% bumps, respectively.
Pennsylvania Insurance Commissioner Jessica Altman attributed the relatively small increase to the state’s efforts to maintain enrollment this year after the Trump administration slashed support. Also, the state’s individual market remains competitive: Nearly half of counties will have a greater choice of insurers next year, and only eight will have just one carrier, down from 20 this year.
While most Obamacare enrollees won’t have to pay more for coverage next year, regardless of how much insurers hike premiums. That’s because they receive federal subsidies that limit their rates to less than 10% of their income. Those who buy their individual health insurance from outside the Obamacare exchanges will feel the impact of the significant rate hikes.