Obamacare premiums

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Yes, healthcare premiums are rising, and this fact is exploited by opponents of Obamacare in two ways:

1. They selectively show the plans or states where premiums rise the most.
   
2. They pretend the rises are due to Obamacare.
   

But healthcare cost are rising inexorably almost everywhere, independent on the system that is used, simply because:

• The population is getting older
  
• Ever more expensive treatments are developed
  
• It is difficult to raise the productivity of much of healthcare
  

So don't be fooled..

Average ObamaCare premium rises to $408 per month

By Peter Sullivan - 01/21/16 05:51 PM EST

The average ObamaCare premium rose to $408 per month for 2016 plans, about a 9 percent increase from this time last year, according to a new report from the Department of Health and Human Services (HHS).

However, 83 percent of ObamaCare enrollees pay far less than $408 because they get tax credits under the healthcare law. The average tax credit for 2016 is $294, meaning that the average share of the premiums that enrollees have to pay is $113. That is up $8 from the $105 people paid on average last year.

The size of the financial assistance from the government in turn increased as the overall premium level rose. The average tax credit increased from $268 to $294 per month.

Premium increases for certain plans in some states were far higher, as much as 40 percent. But the report released Thursday shows that on average premium increases were less than that, and tax credits helped reduce the burden even more.

The administration touted the tax credits as showing that plans are affordable, as the Jan. 31 deadline to sign up for 2016 coverage nears, and officials also emphasized that people can save money by actively shopping around for the best plan.

“There are just 10 days left until the end of Open Enrollment for 2016 coverage and consumers should know that prices are affordable and it’s not too late to shop for the best plan,” HHS Secretary Sylvia Burwell said in a statement. “People coming to the Marketplace for coverage are active, engaged and shopping to save money.”

Thursday’s HHS report did not include information on the average deductible. High deductibles in ObamaCare plans have been highlighted by Republicans, and liberal advocacy groups are calling for action.

Hillary Clinton has proposed a new $5,000 tax credit to help people with out of pocket costs like deductibles, on top of the financial assistance ObamaCare already provides.

The numbers in Thursday’s report are also preliminary, given that more people are still enrolling ahead of the Jan. 31 deadline and that the numbers only cover the 38 states that use the federal HealthCare.gov system.

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As so often, the criticism is waaay overblown..

A lot of attention paid to the shortcomings of Obamacare has come from the increase in the cost of premiums. While it is true that premium increases this year have been steep, it is worth noting that much of the increase may be simply insurance companies coming to terms with the economics of the exchanges. 

In fact, when the prices came out for the first year of the exchanges in 2014, many observers were surprised by how low the costs were. The average premium came in below the original projection of the Congressional Budget Office. 

Additionally, the cost for ACA premiums have come in well below what the price of individual market plans, the precursor to the exchanges, were projected to be during the same years. 

Additionally, in a recent study the Department of Health and Human Services noted that roughly 70% of those going into the Obamacare exchanges have a plan available for less than $75 per month after subsidies are applied.

Obamacare can succeed needs a lot of work - Business Insider

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The whole article is required reading, from the New York Magazine:

• 20M newly insured people
  
• Healthcare inflation curve bended
  
• Premiums are still more than $600 below their forecast and 10% lower than employer sponsored healthcare premiums..
  

Health-care reform is Barack Obama’s highest-profile achievement — though I’d rank it behind his response to climate change as his most significant — and the one that is most likely to symbolize his success or failure as a president. For that reason, Republicans insisted from the outset that the law was failing: They couldn’t fix the website in time, more people would lose insurance than would gain it, medical inflation would skyrocket, and on and on. More recently, two statements have renewed their fervor. First, New York Times reporter Robert Pear published a story headlined “Ailing Obama Health Care Act May Have to Change to Survive.” And second, Bill Clinton was quoted describing the law as a “crazy system.” The right-wing news media have processed these stories as evidence that even liberals admit Obamacare is doomed.
They are evidence of nothing of the sort.
1. Clinton was not describing Obamacare as “crazy.” Jeffrey Young provides the full context of Clinton’s quote, which was a slightly mangled version of a similar riff the former president gave the same day. Clinton’s point in both appearances was that he views Obamacare as a “remarkable success,” but one that’s failed to provide help for people just out of range of qualifying for its subsidies.
2. Obamacare is a tremendous success. The law has given 20 million more Americans access to health insurance, and its cost reforms have helped keep medical inflation at historic lows. The combination of those two achievements is astounding: The federal government is spending less on health care now, after Obamacare’s coverage expansion, than it was projected to spend before Obamacare was signed into law.
3. Premiums are still low. The law may have to change to survive, but it probably won’t. Initial premiums for the exchanges came in dramatically lower than projected, which was incredibly good news. But those premiums were too low. Many insurers discovered they couldn’t compete at such low price levels, and some of them have dropped out of the markets, which is bad. Still, even after prices are corrected, premiums remain more than $600 below their initial forecasts:

Premiums on the exchanges are also 10 percent lower than employer-sponsored insurance. The difference is that the cost of employer-sponsored insurance is hidden — we’re automatically enrolled, and the premiums are deducted from our paychecks, while the cost of enrolling in the exchanges is completely transparent. “You’ve got the full sticker price in front of you – and it can be shocking,” health-care expert Linda Blumberg told the Washington Post.

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Sums it up, a few noticeable points:

• Only a minority will pay those premium hikes
  
• These hikes will go a long way to stabilize the exchanges
  
• Premiums were waaay to low for years, this is catch-up
  
• If people shop around, the hikes would disappear and then some!
  

From Mother Jones:

Obamacare Premiums Will Increase About 25% This Year
KEVIN DRUM OCT. 24, 2016 9:27 PM


The federal government announced today that Obamacare premiums are set to rise 22 percent next year. Charles Gaba estimates that premiums will go up 25 percent. Those numbers are close enough that there's probably no need to dive into the weeds to see if there are any gotchas. Premiums really are going up an average of about 25 percent next year. Here are five things to keep in mind:

1. Yikes. That's a big number.
   
2. The biggest increase is 145 percent in Phoenix. I have no idea why. However, you can be sure that Donald Trump and others will be bleating about Obamacare premiums going up "as much as 145 percent." (For the record, the lowest increase is -12 percent in Indianapolis. See Table 13 here for a full list.)
   
3. The vast majority of people on Obamacare have incomes under 400 percent of the poverty level. All of them are shielded from ever paying more than a cap set by income level. At the lowest income level, they never have to pay more than 3 percent of their income. At the highest income level (about $100,000 for a family of four) they never have to pay more than 9 percent of their income.1This means that in practice, the amount people pay will rise considerably less than 25 percent.2
   
4. The 25 percent number assumes that you keep the same policy that you have in 2016. You can do better if you shop around. For example, HHS estimates that if everyone switched to the lowest-price plan in their metal level (bronze, silver, etc.), premiums would go down an average of 20 percent. Combined with point #3, this means that nearly all individuals will be able to avoid huge increases if they're really in dire financial straits.
   
5. As painful as this is, all that's happening is that after being underpriced for years, Obamacare premiums are finally catching up to the original estimates from the Congressional Budget Office. A couple of months ago I suggested that premiums still had another 25 percent increase ahead, and this would likely be spread out over a couple of years. I was right about the size of the hike, but it's happening in one year instead of two. The good news is that these prices hikes truly should help to stabilize the market and prevent more insurers from abandoning Obamacare. It might even prod a few new ones to enter the market.
   

So that's that. Basically, this increase is painful, but was probably inevitable as insurers got more experience with the market. Subsidies and caps should shield a lot of people from the full pain of the increases, and the higher premium levels should be good for the long-term health of Obamacare. As for Republicans who plan to yell and scream about this, any of them who are serious about reducing the suffering of folks who will be hurt by higher premiums has my full support for boosting subsidy levels.

1The precise numbers for 2017 are 3.06 percent and 9.69 percent.
2There are other subsidies too that shield people from premium hikes. In particular, Andrew Sprung will be mad at me if I don't mention Cost Sharing Reductions,which many people can use to buy silver plans at reasonable prices.

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A new analysis from the Urban Institute found that the average unsubsidized premiums in the Affordable Care Act exchanges, commonly known as Obamacare, are actually 10 percent lower than the full premiums in the average employer plan nationally in 2016.

Nationally, the average employer-sponsored premium was $516 a month, while the unsubsidized marketplace premium was $464. To make an apples-to-apples comparison, the researchers adjusted marketplace premiums to account for the age of enrollees and the different value of the health coverage provided by the marketplace plans.

Skyrocketing Obamacare premiums still lower than employer-sponsored insurance - The Washington Post