Insurers propose 16% increase in ACA premiums for 2017

In eight states and the District of Columbia, insurers are asking for an average increase in premiums of 16 percent for silver-level plans on the health insurance marketplace in 2017, a bigger increase than proposal's for this year.

The analysis from Avalere Health found the price spikes vary widely state-by-state, based on a plan for 50-year-old male nonsmoker. The changes in proposed 2017 premiums range from a 44 percent average increase in Vermont (to $685) to a 5 percent average hike in Washington (to $449).

An analysis of proposed rates at this time last year found an average increase of 6 percent.

The report cautions these increases are just proposals and can be changed by insurers or rejected by state regulators. Even if the current proposed rates stick, many exchange customers will still have financial assistance available.

“Despite premiums rising overall, many consumers will be insulated from higher rates due to premium subsidies that limit monthly costs for many exchange enrollees,” Caroline Pearson, senior vice president at Avalere, said in a statement. “Consumers may have to switch plans in order to avoid dramatic rate increases, but competitive options should still be available in most regions in the U.S.”

More consumers will gravitate toward the lowest cost plans in each state, where the numbers have even greater variation. In two of the nine areas, the average price of the lowest cost silver plan is proposed to decrease by 29 percent in New York and 12 percent in Washington. Heading in the opposite direction are the lowest cost plans in Oregon, which are proposed to have premiums increasing by 42 percent.

Premiums for the lowest cost plans are rising only 6 percent on average for the eight states and D.C. Avalere attributes this smaller increase compared to overall rates as a sign of competition among insurers to pick up enrollees on the most popular plans.

As for what’s behind the overall increase, the analysis said the end of reinsurance and risk corridor payments for insurers are leading many to raise premiums, along with enrollment lagging behind expectations, making “the risk pool smaller and sicker” than carriers had expected.