Obamacare Premiums Are Set to Rise by Double Digits

Zach Montanaro | October 25, 2016
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Can’t say no one warned you about this.

As first reported by the AP, premiums for certain mid-level plans offered on Obamacare's federal exchanges will be going up by double digits, and many people will be stuck with just one insurer. And that news isn’t coming from some conservative think-tank -- it’s coming from the Obama administration itself.

Before subsidies, premiums for benchmark plans will increase an average of 25 percent across 39 states. Some states will see a lower increase, some higher. Additionally, one in five customers will only be able to take a plan from one insurer, after major insurers like UnitedHealth Group, Humana and Aetna have decreased their roles in Obamacare.

While subsidies are available under the law, an estimated 5-7 million people either don’t qualify for income-based assistance, or they buy individual policies that are outside Obamacare’s markets, which means they don’t qualify for the subsidies.

These are not just small cost increases, either. As an example, unsubsidized premiums for a hypothetical 27-year-old in Arizona could jump from $196 to an astonishing $422 if that person bought a benchmark "second-lowest cost silver plan.”

If that same person only made about $25,000 a year, then about $280 of that payment could be subsidized (i.e., picked up by the taxpayers). However, that subsidy significantly decreases if that person makes even $30,000 - $40,000 annually, putting a huge squeeze on the middle class. Also, as has been reported earlier in the year, there are plenty of cases of people “slipping through the cracks” and simply not getting their subsidies.

That, again, is all according to a report by the Obama administration itself.

Choice in insurers is another issue. There will be about a 28 percent decrease in the total number of insurers under Obamacare, from 232 this year to just 167 next year. (The caveat to that, however, is that insurers are counted multiple times if they offer coverage in more than one state. So, for example, Humana or Aetna would count once for each state in which their plans are offered.)

Despite all this, President Obama has continued to simply call these “growing pains” for his signature law. As a solution, the Obama administration has suggested expanding Medicaid and calling for a government-run “public option” that was so hotly debated when the law was first being introduced in 2009.

Democrats have routinely tried to insist that Obamacare is and will always be affordable. So much so that now-House Minority Leader Nancy Pelosi once used the word “affordable” fourteen times in a press conference to try and drive the point home.

Americans don’t seem to be buying into this spin anymore. On top of the 11 percent of people who are still uninsured, the idea that Obamacare can be affordable has almost become a punchline. Recently, a crowd laughed during a congressional debate when a Democrat claimed that Obamacare was affordable, and even Bill Clinton himself has called it a “crazy system.”

It can all be summed up best, however, by Sen. Orrin Hatch (R-Utah), who chairs the Senate committee that oversees the law. He recently stated that all these bad numbers aren’t all too surprising, and that this “does little to dispel the notion we are seeing the law implode at the expense of middle-class families.”

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