Health insurance premiums under the Affordable Care Act will rise sharply next year across most of the country, but tax credit subsidies and a still-competitive marketplace in Ohio will shield the vast majority of consumers here from hefty rate hikes, federal health officials say.
The Obama administration announced that premiums for the second-lowest cost “silver” plans sold through federally facilitated health insurance marketplaces in 39 states will rise by an average of 25 percent, from $242 a month this year to $302 next year.
But some states will see much bigger jumps in premiums under the health care law than others, with Ohio at the low end.
The average premium for the benchmark silver plan in Ohio is expected to rise just 2 percent, from $222 a month this year to $226 in 2017. And that’s before accounting for premium tax credit subsidies available to most individuals with annual incomes ranging from $11,880 to $47,520, and who don’t have access to employer-sponsored insurance or qualify for Medicaid or Medicare.
About 80 percent of marketplace consumers in Ohio are eligible for the income-based subsidies, which will average about $84 next year and drive down the average premium for mid-priced silver plans to about $142 a month, according to figures from the U.S. Department of Health and Human Services.
The subsidies, which are greater for those with lower incomes, increase when benchmark premiums increase so individuals and families continue to pay the same share of their income toward their premium costs and don’t have to bear the full brunt of price increases from insurers.
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More than half of all marketplace consumers in Ohio will be able to sign up for subsidized health plans through the marketplace with premiums under $75 a month, and 60 percent will be able to find plans with premiums below $100 a month when open enrollment begins next Tuesday, HHS officials said.
“Thanks to financial assistance, most current marketplace consumers in Ohio will be able to find plans with premiums between $50 and $100 per month,” said HHS Secretary Sylvia Burwell. “Many uninsured Ohioans could also qualify for financial assistance, as could 64,000 Ohioans currently paying full price for off-marketplace coverage.”
About a quarter-million Ohioans signed up for marketplace coverage, commonly referred to as Obamacare, this year. But an additional 64,000 state residents purchased individual health coverage outside the marketplace, forfeiting the tax credits, according to HHS data.
More than 60 percent of Americans get health insurance through an employer. Another 16 percent use Medicare or Medicaid and 9 percent are covered by individual insurance plans - including Obamacare. Another 2 percent are covered by military plans such as Tricare or the Veterans’ Administration.
While off-marketplace plans must comply with the same minimum benefit requirements and non-discrimination rules as marketplace plans, the federal tax subsidies are only available in the marketplace.
In addition to subsidies, most consumers will qualify for extra savings, known as “cost-sharing reductions,” if they purchase a silver plan and meet certain income requirements.
Still, unexpectedly high medical costs for some insurers, and the expiration of safety net programs built into the health care law to protect insurers from excessive costs have pushed premium prices up faster in 2017 than in the previous years.
And longtime critics of the health care law were quick to point to the rate hikes as evidence that the health care law is failing.
“With wages largely flat or even declining and the cost of living going up, millions of middle-class families in Ohio and across the country are already feeling squeezed,” said Ohio Sen. Rob Portman, who joined a chorus of Republican lawmakers criticizing the law. “The Obama Administration confirms what too many Ohio families already know from experience: health care costs are going up, while health care choices are going down.”
But the situation for Ohioans could be far worse.
Unsubsidized premium prices for benchmark silver plans in Arizona, for example, are projected to rise a whopping 116 percent to $422 a month. Meanwhile, prices in Minnesota, Oklahoma and Tennessee are expected to jump more than 60 percent.
Moderate rate increases or rate decreases in states like Arkansas, Indiana, Nevada, New Hampshire, New Jersey, North Dakota, Michigan, and Ohio reflect a greater number of health insurers participating in the marketplaces and competing on price.
While the number of issuers in Ohio will be reduced from 17 to 11 next year, Ohio is still among only a handful of states with more than 10 insurers in their marketplaces.
That includes Dayton-based CareSource, which controls about a third of statewide marketplace enrollment with about 76,000 Ohio enrollees in its CareSource brand marketplace plans, formerly called CareSource Just4Me.
All told, CareSource has total marketplace enrollment of more than 124,000 consumers in Ohio, Indiana, Kentucky and West Virginia, and plans significant expansion next year.
“We look to grow our marketplace membership by an additional 50,000 to 75,000 in the four states where we have coverage,” said Steve Ringel, CareSource’s Ohio market president.
Ohio consumers can already visit HealthCare.gov to check out their options for 2017 coverage during open enrollment, which ends Jan. 31.
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