{"id":8922,"date":"2016-03-07T13:57:48","date_gmt":"2016-03-07T13:57:48","guid":{"rendered":"https:\/\/www.edrugstore.com\/blog\/?p=8922"},"modified":"2016-03-15T19:43:17","modified_gmt":"2016-03-15T19:43:17","slug":"another-round-of-healthcare-premium-increases-forecast-for-2017","status":"publish","type":"post","link":"https:\/\/www.edrugstore.com\/blog\/current-health-news\/another-round-of-healthcare-premium-increases-forecast-for-2017\/","title":{"rendered":"Another Round of Healthcare Premium Increases Forecast for 2017"},"content":{"rendered":"
\"Healthcare
Premiums for health care plans under Obamacare could jump sharply in 2017.<\/figcaption><\/figure>\n

<\/i>Most Americans who purchased health care coverage under the Affordable Care Act will see an increase in premiums during 2016. However, while premium increases this year are unlikely to be as dramatic as some have forecast, the outlook for health care premiums in 2017 is decidedly less sanguine.<\/p>\n

Anthem, the second-largest U.S. health care insurer in terms of membership, told analysts in late January 2016 that it was managing to eke out a small profit on the health care policies it sells under Obamacare. However, many of its competitors are not faring as well, which means premiums are almost certain to rise even further in 2017.<\/p>\n

In a conference call with analysts, Wayne DeVeydt, Anthem’s chief financial officer, said that a number of other health care insurers are posting premiums that are “still well below what we think appropriate rates are for a sustainable environment.” He went on to say that while Anthem’s price point isn’t wrong, it appears that some of the insurer’s competitors need to strengthen their price points.<\/p>\n

Support for Insurers to Decrease<\/b><\/p>\n

Also increasing the likelihood of steeper premium increases in 2017 is the planned reduction in support that insurers have been receiving under Obamacare thus far. Scheduled for phaseout at the end of 2016 are the federal government’s reinsurance and risk corridor programs, both of which were designed to help insurers make the transition to selling on an exchange. Without that added support, insurers will need to hike premiums accordingly to break even.<\/p>\n

Of the three tiers of insurer support provided under ACA, only the risk adjustment program will continue beyond 2016. The first tier of support to expire will be Obamacare’s transitional reinsurance program, which ends on December 31, 2016. Under that program, all health care insurers and third party administrators of self-insured group health plans make contributions to support reinsurance payments covering high-cost individuals in nongrandfathered plans in the individual market.<\/p>\n

Risk Corridors Program<\/b><\/p>\n

The second tier to expire, the risk corridors program administered by the Department of Health and Human Services, was designed to help keep health care premiums as stable as possible. To accomplish that goal, the program protects against inaccurate rate-setting by sharing risk (both losses and gains) on allowable costs between HHS and qualified health plans.<\/p>\n

\"Affordable
Two of the key support programs for insurers selling coverage under the Affordable Care Act are scheduled to be phased out at the end of 2016.<\/figcaption><\/figure>\n

<\/i>In a January 2016 meeting of industry experts at Nashville Health Care Council’s Wall Street panel, most attendees agreed that the health insurance exchange established under ACA is still trying to find a healthy balance between premium price and medical claims. With the loss of these support programs next year, another round of premium price hikes seems inevitable.<\/p>\n

Could Be Steep<\/b><\/p>\n

Panelist Chris Rigg, senior managed care and health care services research analyst at Susquehanna International Group, said that those premium price hikes could be steep. “If the plans continue to lose money this year and they want to continue to participate in 2017, they are going to have to raise their premiums by a fairly significant amount,” he said.<\/p>\n

Panelists at the Nashville meeting seemed to agree that many, if not most, health care insurers are experiencing losses from health care plans sold on the ACA exchange. According to Rigg, many of the Americans purchasing plans in Obamacare’s first two years were sicker than expected and thus used more services than had been anticipated.<\/p>\n

Health of ACA Enrollees Is Key<\/b><\/p>\n

While the results for 2015 are still being analyzed, said Rigg, it appears that enrollees in 2015 were somewhat less sick. The industry is hoping that a sharp increase in the number of relatively healthy enrollees, those who will need to use their coverage less often, will result from the most recent open enrollment period. Without new and healthier enrollees to help balance out earlier enrollees who were in more urgent need of health care services, it will be difficult for insurers to break even, particularly as support programs are phased out, Rigg said.<\/p>\n

Among the insurers having problems making a go of it under Obamacare is UnitedHealth Group, which in late 2015 said it was pulling back from its efforts to win new customers on the insurance exchanges created by the ACA. According to the Washington Post, the insurer said it might be forced to withdraw from the marketplaces altogether in 2017.<\/p>\n

‘Higher Risks, More Difficulties’<\/b><\/p>\n

This sudden about-face by UnitedHealth was attributed to “higher risks and more difficulties” in selling coverages through the exchanges in a way that is profitable. According to the Washington Post, UnitedHealth is the first major insurer to warn that it may be forced to leave the Obamacare marketplaces. While its departure would not in and of itself undermine the ACA’s exchanges, it would call into question the stability of these marketplaces “that now provide a path to insurance for 10 million Americans.”<\/p>\n

\"Affordable
Claims under health care policies sold in the early years of Obamacare have been significantly higher than most insurers anticipated.<\/figcaption><\/figure>\n

<\/i>UnitedHealth reported a loss of nearly half a billion dollars on its Obamacare plans in 2015 and has said it expects even bigger losses this year. Anthem, which sells health care coverage under the Blue Cross-Blue Shield brand in 14 states, had roughly 790,000 policies under Obamacare at the end of 2015. While the insurer’s Obamacare policies account for only about 2 percent of its total health care policies, those policies were primarily responsible for Anthem’s increased medical spending and lower fourth quarter earnings in 2015. The insurer’s adjusted profit for the quarter fell 41 percent to $305.8 million.<\/p>\n

2016 Premiums Analyzed<\/b><\/p>\n

In its analysis of Obamacare health premiums for 2016 coverage, the Kaiser Family Foundation found that the average increase across the nation was 10.1 percent. However, after taking into consideration the tax credits received by most Americans purchasing ACA health care coverage, the percentage change is a reduction of 0.2 percent from 2015.<\/p>\n

To evaluate Obamacare premiums, the foundation used as its benchmark the second-lowest cost silver marketplace plan in the District of Columbia and major cities across the country. The 2016 change in premium prices varied widely between different parts of the country. While the 2016 premium for the benchmark plan was 10.6 percent lower in Seattle (from $254 to $227), the premium for the same level of care was up 38.4 percent in Nashville (from $203 to $281).<\/p>\n

States with Highest, Lowest Costs<\/b><\/p>\n

To identify the states where Obamacare coverage is most expensive and those that are least expensive, GOBankingRates.com conducted a survey using the lowest-cost silver plan as its benchmark. Its survey compares monthly premiums, deductibles, and copays for a 40-year-old male who is a nonsmoker with an annual income of $40,000. The 10 states with the highest Obamacare costs, in descending order, include New York, South Carolina, Alabama, New Jersey, Mississippi, Oklahoma, Indiana, Delaware, Wyoming, and Colorado. The 10 states with the lowest health care costs under Obamacare, in ascending order, are Idaho, Oregon, Hawaii, District of Columbia, Michigan, Pennsylvania, Texas, California, Utah, and New Mexico.<\/p>\n

If you’d like to read more about health care insurance and other topics of interest to health consumers, check out our blog<\/a>.<\/p>\n

Don Amerman<\/a> is a freelance author who writes extensively about a wide array of nutrition and health-related topics.<\/i><\/p>\n

\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

Most Americans who purchased health care coverage under the Affordable Care Act will see an increase in premiums during 2016. However, while premium increases this year are unlikely to be as dramatic as some have forecast, the outlook for health care premiums in 2017 is decidedly less sanguine. Anthem, the second-largest U.S. health care insurer […]<\/p>\n","protected":false},"author":1,"featured_media":8956,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_autoblog_aioseo_focus_keyphrase":"","_autoblog_aioseo_title":"","_autoblog_aioseo_description":"","footnotes":""},"categories":[18],"tags":[],"class_list":["post-8922","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-health-news"],"acf":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t