Obamacare premiums are projected to rise an average of 10 percent next year, according to a study of benchmark plans in more than a dozen cities, suggesting that the health care law’s troubles will stretch well beyond President Obama’s tenure.
The rate hike is the highest from year to year since Obamacare kicked into full gear in 2014. Rates in Portland, Oregon, will surge 18 percent — the highest among the 14 cities studied by the nonpartisan Kaiser Family Foundation — and premiums will drop in just two of the cities next year.
Analysts said insurers are still adjusting to a population that is sicker and smaller than they expected at this point, and they are having to raise rates to cover the costs.
Meanwhile, a special program designed to pay insurers to cover losses in the early years of Obamacare is expiring, and insurers are likely increasing premiums to make up for the lost taxpayer money, analysts said.
“Those plans are having to raise their premiums substantially now that they have more information to work with,” said Cynthia Cox, associate director of health care reform and private insurance at Kaiser.
Republicans are already using the study on the campaign trail, with the National Republican Congressional Committee saying the rate hikes are more proof that Democrats’ health care law has failed to make insurance affordable.
Ms. Cox said the surge in premiums should level off after this year. She said some insurers are even describing the large hike as a “one-time market correction.”
But the series of proposed increases poses an election-year headache for Mr. Obama, who is trying to shore up support for his signature achievement in the months before he leaves office.
The timing also is bad for Democrats: Consumers won’t get a complete look at their 2017 payments until enrollment kicks off Nov. 1 — one week before Election Day.
Hillary Clinton, the presumptive Democratic presidential nominee, has vowed to build on Obamacare’s reforms, while likely Republican nominee Donald Trump says he will repeal the law.
“Republicans will raise the high health premiums and try to make that a campaign issue,” said Darrell West, director of governance studies at the Brookings Institution. “However, I haven’t heard Trump talk much about that, so unless he really emphasizes it, that issue won’t get much traction. The Republican nominee is more focused on terrorism, trade and immigration.”
The hikes are proposals at this point, and the federal Health and Human Services Department predicted that state regulatory agencies will force the rates down. HHS also predicted that consumers will pony up relatively little of the bill once tax subsidies are applied to their monthly bills.
“Last year, HealthCare.gov premiums increased an average of just $4 per month after shopping and tax credits, and consumers will benefit from shopping and tax credits again this year,” HHS spokesman Benjamin Wakana said.
Republican critics say the double-digit increases are more proof that the law has failed and must be repealed.
House Speaker Paul D. Ryan, Wisconsin Republican, is slated to announce a long-awaited replacement of the 2010 health care law in the coming weeks, giving Republicans an alternative to take to voters.
In the meantime, Republicans continue to chip away at the law, delaying some of the taxes and fighting in court, where a federal judge has ruled against an Obamacare program that reimburses insurers for slashing low-income customers’ out-of-pocket costs.
Kaiser studied the benchmark “silver,” or midlevel plans, the government uses to calculate costs and subsidies in each market.
Half of the 14 markets Kaiser has studied will offer fewer plans to Obamacare customers on the exchanges, with the withdrawal of UnitedHealthcare, an industry giant that is severely curtailing its involvement with the health care law.
After Portland’s 18 percent, the highest rate hikes will be in New York City and the District of Columbia at 16 percent for their benchmark plans.
Providence, Rhode Island, with a drop of 13 percent, is one of only two of the 14 cities where rates will decrease. Rates in Indiana are projected to drop 4 percent.
More than half of the 23 co-op plans designed as consumer-oriented alternatives to big corporate players in the marketplace have folded, forcing those customers to switch plans and handing Republicans more ammunition in a pivotal election year.
“Across the country, people are seeing how much more money they’re expected to pay for their health insurance premiums next year,” said Sen. John Barrasso, Wyoming Republican. “For most Americans, the Democrats’ health care law has meant higher prices, worse health care and less freedom to choose what’s right for their families.”
