Despite an official announcement that the premiums for Obamacare health coverage will increase sharply next month, Obama administration officials are giving assurances that taxpayer-provided subsidies will insulate participants from the blow. Before the subsidies, premiums for the health care plan will go up by an average of 22 percent across those states served by the federally mandated online market. In addition, the number of insurers serving the federal market will decrease from 232 to 167: a loss of approximately 28 percent.
"We think they will ultimately be surprised by the affordability of the premiums, because the tax credits track with the increases in premiums," said Kevin Griffis, assistant secretary for public affairs at the Department of Health and Human Services in a media briefing today. He said that rates for 2017 are about the same as those forecasted by the Congressional Budget Office forecast when the law was proposed. "The initial marketplace rates came in below costs," Griffis said. "Many companies set prices that turned out to be too low."
Administration officials say that consumers can still shop for cheaper plans and find bargains. Sign-up for the plans starts on November 1, while ‘window-shopping’ for plans and premiums is already available.For coverage effective on January 1, participants need to choose a health plan by December 15. With a few exceptions, the last day to sign up for Obamacare is January 31, 2017. Plans are available on HealthCare.gov and state-run exchanges.
Federal government sources said that while the average premiums on the benchmark health plans are increasing, more than 70 percent of people buying insurance can get a health plan for less than $75 a month for 2017. To do so, participants must choose a low-cost plan with limited benefits and take advantage of all the subsidies available. Those who currently have coverage through the exchanges can save money by switching plans, the administration said. More than 75 percent can save money by switching to the lowest-cost plan within the level of coverage that they have previously selected.
Recently, three major health insurers pulled out from offering coverage in markets throughout the United States. The Obamacare insurance exchanges are thus under strain. The Obama administration contends that 1 in 5 people buying insurance through the marketplaces will have only one company offering coverage in their area.