Obamacare premiums set to climb but subsidies cushion blow

HEALTH INSURANCE PREMIUM'S under the Affordable Care Act are expected to rise in most cities and states in the United States. However, in a study by the Kaiser Family Foundation, it was shown that health insurance premiums in Providence will decline before tax credits.
HEALTH INSURANCE PREMIUM'S under the Affordable Care Act are expected to rise in most cities and states in the United States. However, in a study by the Kaiser Family Foundation, it was shown that health insurance premiums in Providence will decline before tax credits. / COURTESY KAISER FAMILY FOUNDATION

NEW YORK – People in some U.S. cities will see the cost of Obamacare health plans climb as much as 50 percent next year, though subsidies will offset much of the increases, according to an analysis by the Kaiser Family Foundation.

Kaiser tracks premium increases in 21 U.S. cities, providing a snapshot of how the health law is faring around the country. The cost of mid-level health plans will climb by double-digit percentage rates in 15 of those cities and decline in two, one of which is Providence, according to an analysis of preliminary rates published Thursday.

The estimates don’t include Obamacare’s subsidies, which offset the rate increases for many people with low and moderate incomes. All numbers in the study were calculated for a state’s second lowest cost silver program for a 40-year-old nonsmoker who earns $30,000 a year.

In Providence, premiums for silver plans (the most popular plan choice on the marketplace) will decline 5 percent before the applied tax credit from 2017 to 2018, from $261 to $248. After the applied tax credit, all 21 cities will see a 3 percent decline from 2017-2018. Premiums in Providence after the tax credit will decrease from $207 to $201. This means that the tax credit in the state applied to such policies will decline from $54 to $47. Providence was the only city in the study that saw tax credits decline year over year.

- Advertisement -

Only Burlington, Vt., also saw a pretax premium decline in the survey, declining $1 to $491.

Insurers are seeking greater premium increases than in years past because of uncertainty about how the Trump administration will run the Affordable Care Act’s markets, Kaiser found. In Delaware, for instance, the state’s lone ACA insurer proposed raising premiums 12.8 percent on average to account for those risks.

Simultaneously, Wilmington, Del.’s, premium tax credit is estimated to increase 99 percent from 2017 to 2018 to $430, the largest credit of any of the 21 cities surveyed in the study.

Republicans control the presidency and both houses of Congress for the first time since Obamacare passed but have so far failed in their attempts to repeal and replace the health law. In the wake of the Senate’s failure to pass a repeal measure last month, Trump threatened to undermine the law. “As I said from the beginning, let Obamacare implode, then deal. Watch!” he tweeted on July 28.

There are two main ways Trump could do that: asking his agencies not to enforce the individual mandate created under Obamacare; and stopping funds for the subsidies that help insurers offset health care costs for low-income Americans. Both moves could further disrupt the ACA’s individual markets and lead to higher premiums.

Zachary Tracer is a reporter for Bloomberg News. PBN contributed to this story.

No posts to display