Key Obamacare premiums to jump 25 percent next year

Premiums for a crucial category of Obamacare plans on HealthCare.gov will rise by 25 percent on average next year, more than three times larger than this year's price increases, the Obama administration said Monday.

By comparison, average prices for the second cheapest silver-level plan — which is used as the benchmark to determine premium subsidy levels — had increased by just 7.5 percent on average in 2016 and 2 percent in 2015.


The Department of Health and Human Services report, released just two weeks before Election Day, is sure to provide fresh fodder for Donald Trump and Republicans in down-ballot races to attack the law. Democrats, who have increasingly warned about the escalating costs of Obamacare coverage in some areas, have pushed for Republicans to give up on repeal and work on fixes to the law.

Federal health officials also confirmed that roughly one in five people in the states that use HealthCare.gov must shop from only one insurer following decisions by several major national and regional insurers to pull back from the Obamacare marketplaces in 2017. On average, exchange customers will have 30 plan options to choose from for 2017, down from 47 this year.

The average rate increases outlined in the report do not account for premium subsidies for which the majority of exchange customers qualify. HHS officials said nearly three-quarters of exchange customers will be able to find a plan for $75 a month or less after subsidies.

“Even in places with high rate increases this year, consumers will be protected,” said Kathryn Martin, HHS acting assistant secretary for planning and evaluation.

HHS officials said their outreach and advertising will emphasize that most exchange customers won't pay the massive premium increases featured in headlines this year. The enrollment period begins Nov. 1 and lasts three months.

Still, the spike in benchmark plan prices may pose an additional obstacle in getting more people enrolled next year, especially young adults who administration officials are targeting.

As in past years, premiums vary greatly across the country. Some states will see average monthly prices for benchmark silver plans spike at least 50 percent for 27-year-olds. Those states include Arizona, Alabama, Nebraska, Oklahoma, Pennsylvania and Tennessee. The price increase for Arizona's benchmark plan, at 116 percent, is the highest of any state.

By contrast, Indiana's average benchmark plan price will decline by 3 percent for 27-year-olds. Arkansas, New Hampshire and Ohio will each see only a 2 percent increase.

Because the law's subsidies are tied to the cost of the benchmark plan, bigger premium increases mean the government will spend more to help lower costs for subsidy-eligible customers.

HHS says 15 new insurers will enter the exchanges in 2017, while 83 insurers are dropping off the marketplaces. About 80 percent of customers will have at least two companies to choose from; just more than half will have at least three.

The Obama administration expects 13.8 million people nationwide to pick a plan during the upcoming open enrollment season, about 1 million more than signed up this year.