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Study: ACA silver plan premiums up average of 34%

Ricardo Alonso-Zaldivar
Associated Press

Washington — As online window shopping on HealthCare.gov went live Wednesday, an independent analysis found that premiums for the most popular health plans under the Affordable Care Act are rising by an average 34 percent next year.

The analysis of newly released government data by the consulting firm Avalere Health found that the Trump administration’s actions are contributing to the price hikes, adding instability to the underlying problems of the health law’s marketplaces.

The 34 percent average increase is for silver plans in states using HealthCare.gov. Premiums also are going up by double digits for plans with different levels of coverage, including bronze (18 percent), gold (16 percent), and platinum (24 percent).

Many states had higher increases for silver plans, the most commonly purchased. Only three states will see declines.

Avalere found that average silver plan premiums will go up by 49 percent in Florida, 43 percent in Missouri, and 65 percent in Wyoming.

Avalere said market instability is driven by the continued debate over “Obamacare” repeal and replace, President Donald Trump’s recent decision to end subsidy payments to insurers, and the president’s executive order that could open a path for lower cost plans outside of the Obama-era law.

“We’re seeing this marketplace instability lead to large jumps in premiums and fewer health plan offerings,” said Chris Sloan, a senior manager with the health industry consulting firm.

Significant rate increases also are expected in the 11 states and the District of Columbia that run their own health insurance websites.

Consumers eligible for income-based tax credits will be protected from rising premiums but those who pay full-cost face a second consecutive year of sharp premium increases.

On Wednesday, officials at the Health and Human Services Department posted plans and premiums for the coming year on HealthCare.gov so consumers can begin “window shopping.” Starting next week, on Nov. 1, new customers can submit applications, and returning ones can make changes to their coverage. Open enrollment will end early, on Dec. 15, about half the time allotted under Barack Obama’s administration.

The Trump administration’s launch comes after the president abruptly pulled the plug on federal payments that reimburse insurers for reduced copays and deductibles they’re required to provide to people of modest means. That exposes insurers to a potential $1 billion loss for the remainder of this year, and state regulators have been approving premium increases for next year to compensate.

In Michigan, the state Department of Insurance and Financial Services announced that premiums will rise an average of 27 percent. Eight Michigan insurers will participate in the federally facilitated marketplace. In each county, there will be at least two insurers selling plans. About 80 percent of Michigan customers on the federal marketplace qualify for tax credits to offset their premium costs.

Bipartisan legislation to resolve the problem is pending, and Wednesday the Congressional Budget Office said the bill would reduce federal deficits and “would not substantially change the number of people with health insurance coverage.” The outlook for the legislation, sponsored by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., is uncertain. Trump has sent mixed signals about whether he would support it.

About 10 million people currently have private health insurance through government-sponsored markets like HealthCare.gov. More than 8 in 10 customers receive tax credits to help pay their premiums, and that aid is still available despite the political turmoil.

Unlike the Obama years, the Trump administration has set no enrollment goal for 2018.

“We are really focused on having a smooth consumer experience,” said Randy Pate, director of the HHS office that oversees the program. “That is our target for this year.”

Administration officials say they have made a series of improvements to the sign-up process unheeded in the acrimonious political debate over health care.

Among them:

■ Greater use of plain language on HealthCare.gov and easier searches for covered prescription drugs and network medical providers.

■ An option to request a call-back from the federal consumer assistance center, which is intended to minimize long hold times.

■An online option for consumers to request enrollment assistance from a private insurance agent or broker in their area. (This move could prove controversial, since the administration also cut funding for nonprofit programs that provide enrollment assistance.)

“These premium hikes sound scary, but the reality is that in most cases consumers won’t be paying that much,” said Larry Levitt of the nonpartisan Kaiser Family Foundation, who has followed the health law from its early days. “Those receiving subsidies from the government to help pay their premiums will be shielded from any increase at all because the government subsidy will rise along with the premiums.”

That’s not the case, however, for an estimated 7 million unsubsidized customers, most of whom buy individual plans outside the government markets.

“There is a danger that middle-class people who don’t get government help in paying their premiums could be increasingly priced out of the market,” he said.