The ACA Premiums Increase in Perspective

Colin Baillio Working With Health Action New Mexico Volunteers. Photo Credit: Health Action New Mexico

Colin Baillio fielded a lot of phone calls after the news broke that Affordable Care Act (ACA) marketplace premiums would increase an average of 25 percent in 2017. As a health outreach and education professional at Health Action New Mexico, Baillio and his organization have helped more than 5,000 New Mexicans enroll in marketplace plans or Medicaid. As soon as enrollees heard about possible increases, he started hearing from them.

“People were incredibly stressed. One woman called me sobbing — she had heard the news and was terrified because she couldn’t afford to pay 25 percent more. She had several chronic health conditions and she desperately needed health insurance so that she could see her doctors and get her medications. We got online together and went through her options. It turned out that she could get the exact same plan she had in 2016, for less money. So here she was absolutely panicked about this huge increase and her premium actually went down.”

The ACA’s Financial Supports Will Protect Many

This New Mexico resident’s worry about marketplace premium increases is more than understandable, but — as in many cases — may not be warranted. Eighty-four percent of people who have marketplace health insurance get help paying their premiums and 56 percent get help paying out-of-pocket costs thanks to cost-sharing assistance available in silver plans that helps lower copays and deductibles.

As premiums rise, so will subsidies. That means that most consumers will likely not bear the brunt of these increases, especially if they switch plans. In addition, the frequently cited 25 percent increase is an average, so premiums will not rise nearly that much in some states. In fact, in Indiana and Massachusetts, the second-lowest cost silver plan premium decreased by 3 percent, and in three additional states where data is available, premiums increased by less than 5 percent.

People who buy their own coverage should not be discouraged from going to healthcare.gov, entering their income and zip code, and finding out what plans or what personal assistance may be available to them. As Colin and his client discovered, the options could be much better than they expect.

Still, some people will see their premiums rise, especially those who do not qualify for subsidies. In real numbers, that amounts to about 2 million people. Among this group there are probably people with the kind of illnesses or health history who would have been denied insurance before the ACA, or who would have been bankrupted by a serious accident or illness if they didn’t have the coverage their marketplace plans provide. But, even all of those upsides do not take away the sting they will feel writing a bigger check every month, or the risk that unaffordable health care costs will pose to their health and financial security.

It will be important for these consumers to shop around to see if they can find a plan with a lower premium that still works for them.

Improvements will need to be made

Assuring that everyone can afford their insurance and the care they need is one of the ACA’s key goals, and some fixes are needed. The Department of Health and Human Services has already launched a robust enrollment campaign, geared particularly toward young adults, to offer people assistance enrolling, and help them more easily understand the financial support the ACA makes available to them.

Here are a few other things that could make a big difference:

1.Increase the subsidies offered to cover a larger share of people’s premiums and lower their monthly bills.

2.Raise the income level needed to qualify for subsidies so more people can get support paying their premiums.

3.Extend the provision in the law that helped insurers financially when they ended up with sicker enrollees. This will encourage insurers to stay in the marketplaces.

4.Give marketplace shoppers the option to buy into a publicly administered health insurance plan like Medicare.

Moving Forward

Whether or not these kinds of changes, or others, are implemented will depend greatly on the next administration and how it approaches health care reform. As we move forward through the next year, it will be essential to keep the law’s successes and challenges in perspective. Expand what works, fix what doesn’t work, and continually strive to assure that our health care system is working as well as it can for all of us.

For his part, Colin and his team will continue their hard work to get people who are eligible for coverage enrolled. In his words:

“I am not exaggerating when I say that I have seen Obamacare help thousands of people. And, I am going to continue to do everything I can to spread the word that it works.”