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Higher Premiums & Fewer Choices in 2017 for Obamacare Buyers

Higher Premiums & Fewer Choices in 2017 for Obamacare Buyers


photo 2Consumers throughout America may see an increase in monthly premiums for health coverage next year, as a result of Health Insurers being stung by the high cost of covering public health exchange enrollees and struggling to make a profit.

The nation’s largest health insurer; UnitedHealth Group Inc. announced in April that it will exit at least 24 of the 34 states where it offers health plans on the public health insurance exchanges next year, leaving Obamacare buyers with fewer choices in 2017.

A recent Kaiser Family Foundation analysis suggests, consumers options may be limited when choosing from insurers due to UnitedHealth’s exit from the marketplace; and would likely have the largest effect in Alabama, Arizona, Iowa, Nebraska & North Carolina.

United Healthcare expects to lose $650 million on its exchange business in 2016 that covers 795,000 customers, and they are not alone. According to new reports, several insurers are contemplating hiking up premium costs and pulling out of Obamacare exchanges in certain states to offset 1

The first two states to make insurers’ premium proposals for 2017 public, were Oregon & Virginia.The largest insurer for people buying coverage through the Oregon health exchange; Providence Health Plan, is seeking an average increase of 29.6%. In Virginia, the Associated Press reported that nine insurers have projected average rate hikes ranging from 9% to 37%.

Humana announced making changes to exchange offerings for next year, “to retain a viable product for individual consumers, where feasible,” possibly including “statewide market and product exits both on and off exchange, service area reductions and pricing commensurate with anticipated levels of risk by state.” Humana sold plans on exchanges in 15 states this year.

Aetna Inc. reported that the company’s public exchange business remains unprofitable, during a call with investors in February.

In Addition, news reports relayed some Blue Cross Blue Shield plans in Alabama & North Carolina, have also reported a loss on plans sold on the Affordable Care Act (ACA) exchanges.

Anthem Inc., the nation’s largest for-profit Blues plan, is one notable exception. Last week Anthem’s officials stated the company remains on target to post a slim profit this year on its public exchange business.

UnitedHealth’s withdraw highlights, in a very public way, difficulties insurers are having in the fledgling exchanges. “We are not yet in a period of stability,”,stated Gail Wilensky, an economist and head of Medicare and Medicaid under former President George H.W. Bush.

Insuring people who signed up for health plans on the exchanges has been more costly than insurers anticipated. Health plans were “flying blind” in the first two years under the public exchanges because they didn’t know how sick these new members would be, stated Wilensky.

Special enrollment periods offered by the Obama administration in 2014 and 2015 to boost the number of insured individuals also played havoc with rate-setting. Many of these people used medical care and then dropped their insurance; as a result health plans incurred the expense, but lost whatever premium would have been paid the rest of the year, Wilensky explained.

According to a recent Blue Cross Blue Shield Association analysis, people newly enrolled in those plans have higher rates of chronic conditions, such as high blood pressure, diabetes, depression, heart disease, HIV and hepatitis C. The analysis also reported people newly enrolled more frequently used medical services and had medical costs that were 22 percent higher than Blue Cross Blue Shield members with private health insurance, on average, in 2015.

The State Director for the advocacy group, Enroll America, Sorien Schmidt, recently cautioned the public not to panic when they hear about rate increases, since many exchange buyers receive federal subsidies and noted, “A rate increase does not equal a premium increase” . Schmidt explained, It’s in the consumers’ best interest to shop around each year, because plans and premiums change annually. Schmidt went on to say, “Check to make sure that you are picking the best plan for both your budget and your health needs”. Open enrollment for 2017 begins November, 1st.













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