Obamacare premiums will continue to rise next year, based on early rate filings from health insurers across the nation, at least before you account for the law’s financial assistance.

The initial 2019 rate increases, compiled by the Kaiser Family Foundation, range from a modest 7 percent bump in Richmond, Virginia, to a 36 percent hike in Baltimore for so-called “benchmark” plans on which the law’s tax subsidies are based. (It’s too soon to say where the national average might end up, and every market is unique anyway.)

The primary culprits for the increases seem to be the repeal of the individual mandate penalty in the Republican tax law and the Trump adminstration’s expansion of non-Obamacare plans, in addition to the continued effect of President Trump’s decision to end the cost-sharing reduction payments to insurers. Some of this is also the general increases that we would expect for inflation and the actual medical costs insurers paid the year before.

By the looks of it, two important trends that came into sharp focus in 2018 are going to carry over into 2019:

Because Obamacare caps the premiums that people who qualify for subsidies are required to pay, the federal taxpayer is going to be asked to make up the increasing gap between the gross premiums that health insurers are charging and the net amount subsidized customers pay. People who make too much money to qualify for assistance are going to have to choose between paying the full amount of the increased rates or buying a less comprehensive non-Obamacare plan, now that the Trump administration is making those more available again — or, I guess, they could go uninsured.

Let’s take those one at a time.

How Obamacare premium hikes cost the federal taxpayer

The Affordable Care Act is designed so that people who receive tax subsidies (those making less than 400 percent of the federal poverty level, $98,000 for a family of four) pay a set percentage of their income on their health plan and not a penny more, no matter the actual premium set by their insurer. The federal government picks up the rest of the cost.

This has been compounded since the Trump administration ended CSR payments. Health insurers responded by hiking rates specifically on these benchmark plans that are used to calculate the subsidies. So the size of tax credits increased, which allowed many people to buy more generous plans at a lower price or less generous plans for free.

Examples from the KFF database help make this less abstract. In Burlington, Vermont, insurers are planning to hike premiums on the benchmark plan by 28 percent, before you apply any subsidy.

As a result, the size of the subsidy will increase by nearly 45 percent for a 40-year-old nonsmoker making $30,000 a year in 2019.

With that subsidy, this person can buy the benchmark plan next year for just 2 percent more than they did in 2018. Or they could buy a less generous plan that would cost them 96 percent less than it did the year before. Or, maybe even better yet, they could buy a more generous plan for 36 percent less than it cost in 2018, thanks to the bigger federal tax credit.

In other words, the cost to the subsidized customer will either be the same or even lower in 2019 than it was in 2018, but the federal government (and thus the federal taxpayer) is making up the difference. This is why the CBO estimated before Trump decided to pull the CSRs that federal spending on subsidies would increase by tens of billions of dollars if CSRs were ended.

The plight of the unsubsidized Obamacare customer

So the bottom line for subsidized customers is not so bad. They are protected from premium increases by the law’s subsidies.

But for people who don’t receive any federal assistance, they are going to feel every dollar of those rate hikes. A family in Baltimore making $110,000 a year is going to see the premium for that benchmark plan increase from $456 a month to $622.

That’s an additional $2,000 over a full year. Even if you’re making low six figures, you’re probably going to feel that pinch.

Those people are going to be left with a choice, one that Obamacare has always presented them but that became more pronounced over the years as premiums continued to go up.

If they have high-cost medical conditions, they might have no option except to pony up for these higher prices. Other people might decide to buy less generous Obamacare plans, if they are risk-averse. Or they could decide to leave the law’s markets altogether.

That will be easier than ever for non-subsidized customers, after the actions taken by Republicans in Congress and the Trump administration:

There is no penalty for not having insurance, after the GOP tax bill ended the mandate.

The Trump administration has expanded non-Obamacare coverage, through association health plans and short-term insurance that is not required to comply with the law’s rules about preexisting conditions.

For younger, healthier people or people inclined to take on more risk, maybe that’s not such a bad deal. But particularly for the people who don’t receive federal assistance but do have serious medical needs, this is only getting worse.

A bit of good news: Insurers are entering — not leaving — the Obamacare markets

So subsidized customers are actually a pretty good deal, but federal taxpayers and unsubsidized customers are paying the cost. There is one piece of unqualified good news so far in the 2019 Obamacare landscape: No insurers are pulling out of the law’s markets, and in fact, a few insurers are entering them.

”The other things to note so far is that insurers are on net entering the market and not leaving the market,” David Anderson at Duke University told me. “This is interesting as a sign that the chaos of 2017-2018 is seen as subsiding.”

You might remember all the panic about bare counties last year, as it looked like some areas of the country would be without any insurance options at all. But all those bare spots were filled in before customers picked their 2018 plans, thanks in part of the law’s subsidy structure and the work of state and even Trump officials.

We could still see some empty counties pop up as filing season goes on. But so far, so good.

This story appears in VoxCare, a newsletter from Vox on the latest twists and turns in America’s health care debate. Sign up to get VoxCare in your inbox along with more health care stats and news.

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