It's still early days for the Affordable Care Act, so it's perhaps no surprise that insurers and Americans are figuring out how to make it work. But it may be dismaying to some consumers to learn that it appears 2017 may bring another year of big rate hikes for health insurance coverage.
The first two states to release insurers' premium proposals for next year hint suggest that individual insurance premiums could rise by as much as one-third. In Oregon, the steepest requested rate hike is from Moda Health Plan, which wants to raise individual plan premiums by 32.3 percent. In Virginia, five of the biggest insurers are asking for increases of 9.4 percent to 37.1 percent for individual policies, according to Virginia's Daily Press.
The proposed rate hikes follow an average increase of 8 percent for 2016, and are being driven by some of the same factors: higher pharmaceutical costs and sicker-than-expected patients. On Wednesday, the health insurer Humana (HUM) said it may exit some state ACA health insurance exchanges "to retain a viable product."
That echoes UnitedHealth Group's decision earlier this year to pull back from selling insurance plans through the ACA in most of the states where it had offered its services.
While some insurers are struggling to figure out how to make a profit on plans sold through the ACA, some consumers say they're having a tough time finding plans that fit the "affordable" description of the ACA. Almost six out of 10 people who visited an ACA marketplace, but didn't enroll, said it was because they couldn't find a plan they could afford, according to a survey published last year by the Commonwealth Fund.
So what about the individual subsidies that are supposed to help defray the cost of Obamacare? While millions of Americans qualify for incentives that lower their out-of-pocket costs, they don't cover everyone. Subsidies are generally available to families earning less than 400 percent of the federal poverty level. A family of three, by that measure, wouldn't receive a subsidy if their income was higher than about $80,000.
That's where the financial pain may kick in, with the Commonwealth Fund finding that 43 percent of adults said they didn't enroll in an Obamacare plan because they weren't eligible for either a subsidy of Medicaid.
Some Americans are turning to short-term health-care plans as an alternative, although they have significant downsides. Most of them, for instance, don't cover prescription drugs. Since the plans don't qualify as individual coverage under the ACA, consumers who rely on the short-term plans face tax penalties for lacking coverage.