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Health Insurance rates Increase in 2016

October 27, 2015 by bob

The Obama administration said many consumers will see noticeable premium increases when buying health coverage on insurance exchanges in 2016, acknowledging for the first time what many health-care experts had predicted.

Federal officials said Monday that the price of the second-lowest-cost midrange “silver plan”—a key metric for premiums around the country—will increase by 7.5% on average across the three-dozen states that rely on Washington to administer the health law for them.

And 60% of enrollees—across 30 of the largest markets in the U.S.—will see the average rate for that benchmark plan rise by 6.3%, according to a Health and Human Services report on premium data that hasn’t yet been made fully public.

In many parts of the country, the most popular plans have sought and won premium increases in the double-digits for the year ahead, in a move that could force enrollees to try to look for a less familiar brand of coverage. Premiums are a major issue for consumers and politicians as they scrutinize the effectiveness of the Affordable Care Act.

Insurers sought increases for 2016 because many found business more costly than expected or have incurred losses. The law requires companies to sell policies to anyone regardless of their medical history, and with only limited variations on premiums.

Insurers, who have priced plans for 2016 in part based on what they experienced in 2015, also faced higher costs in part due to rising prescription-drug prices, and they saw lower-than-expected payouts from a federal program that aims to offset carriers’ risk by providing funds to companies with costlier, sicker consumers.

Averages don’t reflect what individual consumers will see, and premium amounts vary across the country. Some enrollees may see significantly higher or more modest rate increases.

State insurance regulators around the country have largely approved all or most of the hefty premium increases sought by the largest health plans for 2016. Some have jumped by double digits: On average, premiums will rise in 2016 for the second lowest-cost silver plan by 31.5% in Alaska and 22.9% in Oregon, according to the report. Oklahoma will see a 35.7% hike.

 

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