The Affordable Care Act exchanges are not the gravy train insurers expected, so they are hiking their prices and minimizing their presence to cope, according to analysts.
The benchmark silver plan, which is the basis for federal subsidies, is expected to rise to an average of almost $300 a month in 2017. The price is based on coverage for an average 27 year old enrolee in a total of 43 states. This reflects a 22% jump over last year’s average, according to reports.
In comparison, the benchmark plan’s premium increased by only 7% on average this year.
“Relatively few people will feel the premium increases, but everyone will hear about them,” explained Dan Mendelson, president of consulting firm Avalere Health. “That will have an effect on the perception of the program.”
Thus, the premium increases mean that Obamacare is becoming more expensive for the federal government because of the subsidies it offers to the enrolees.
Further, choices on the exchanges will be limited as the number of carriers will decrease to 228 next year from 298 this year. Around 20% of the buyers returning to the exchanges will have only one carrier to choose from, although the insurer will likely provide a variety of plan choices.
Although the changes have been called a shakeout, experts are more circumspect about the price hikes and the musical chairs going on with the insurers. According to them, this is a transition period that is expected from a measure where premiums were priced too low to attract new customers and insurers are steering through a relatively new market.
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