Benchmark ACA premiums up 25% for 2017

The average monthly premium for the second-lowest cost silver plan on the Healthcare.gov marketplace will go up by 25 percent for 2017, according to HHS, the largest year-over-year jump in prices since the marketplace opened.

The figure was on the fifth page of a report from HHS’s Office of the Assistant Secretary for Planning and Evaluation. Much of its 40 pages were dedicated to how the price increases are mitigated by other elements of the Affordable Care Act (ACA), such as subsidies and the ability to shop for coverage, and emphasized provisions of the ACA that expanded coverage, such as not allowing insurers to deny coverage based on preexisting conditions.

The hikes in premiums, however, are well above previous years.

“In the second year of the marketplace, average premiums for the second-lowest cost silver plan increased only 2 percent, and in the third year they increased 7 percent. This year, marketplace premiums are increasing more than they have the past two years,” the report said. “Through 2016, marketplace rates remained below initial projections from the independent Congressional Budget Office (CBO), and below the cost of comparable coverage in the employer market. This year, with two years of cost data available, issuers are adjusting their premiums to bring them in line with costs.”

Rates through 2016 were projected to be 12 to 20 percent higher by the CBO. Marketplace premiums are also lower than those offered in employer-sponsored coverage, according to the Urban Institute.

After the report was released Oct. 25, HHS Secretary Sylvia Burwell tried to emphasize how the premium hikes wouldn’t affect many consumers, tweeting that most people would find plans for less than $75 per month thanks to available financial assistance. Subsidies were available to an estimated 84 percent of exchange customers in 2016, and price increases may make more customers eligible for tax credits in 2017. HHS has also planned to increase outreach to the estimated 2.5 million off-exchange customers who would qualify for subsidies.

The data released by HHS only covered states which use the federally-facilitated marketplace. Of those, the five largest average increases for the second-lowest silver-level plan will be in:

• Arizona: 116 percent ($196 in 2016 to $422 in 2017)
• Oklahoma: 69 percent ($252 to $424)
• Tennessee: 63 percent ($236 to $385)
• Alabama: 59 percent ($244 to $384)
• Nebraska: 51 percent ($272 to $411)

One state, Indiana, had its average benchmark premium decrease by 3 percent to $229.

Open enrollment begins Nov. 1, with customers needing to select and purchase a plan by Dec. 15 to have coverage on Jan. 1, 2017.