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Will My Health Insurance Premium Go Up in 2016?

Will My Health Insurance Premium Go Up in 2016?

Posted Jul 27, 2015 by Author

Many Americans breathed a sigh of relief after the Supreme Court’s June 25, 2015, ruling on King v Burwell, which upheld Obamacare health insurance subsidies and determined them to be legal in all states, those with federally facilitated exchanges as well as those with their own. However, consumers remain concerned about health insurance and affordability, especially with reports of potentially substantial increases to the premiums these subsidies help lower.

This summer, words like “hefty,” “hikes,” and “double digits,” pepper headlines related to Obamacare premiums, with some news stories touting potential premium increases as high as 85 percent for 2016. This buzz can’t help but leave many people wondering what will happen to their health insurance rates next year.

Why the fuss about health insurance rates right now? 

On June 1, 2015, proposed rate increases of 10 percent or more became available for public review in all states with federally facilitated and supported health insurance exchanges (i.e., those that use HealthCare.gov for enrollment) and some states that operate their own health insurance exchanges.

This annual practice takes place because the Affordable Care Act requires health insurance companies to publicly disclose and justify premium rate increases of 10 percent or more for non-grandfathered plans. Officials, experts and the public may review these rates and question and comment on them before they are finalized. 

As explained at HealthCare.gov, the rate review process is designed to improve insurer accountability and transparency, ensure that experts evaluate whether the proposed rate increases are based on reasonable cost assumptions and solid evidence, and give consumers a chance to comment on proposed rate increases.

Information on proposed 2016 premium rate increases for health insurance plans sold on and away may be found at RateReview.HealthCare.gov. If you cannot find information for your state listed, it should be available at your state department of insurance. 

How much will my health insurance premium increase in 2016? 

At this point, it is too early to tell. Proposed rates are not necessarily final rates. Your health insurance could cost more in 2016, but it could also cost less … and it could also stay about the same.

In a June 1, 2015 press release, the Centers for Medicare and Medicaid Services said that insurance companies project that most people will be enrolled in plans with proposed rate increases of less than 10 percent.1

Health insurance premium rates for 2016 will be finalized in the months ahead, but no later than Nov. 1, 2015, when 2016 open enrollment begins. CMS expects most rates to be approved and made public in October—although, some may be approved earlier.

Why will health insurance premiums increase in 2016?

Many factors influence health insurance premium rates. As the Kaiser Family Foundation explains, they include “the accuracy with which insurers had predicted their rates in 2014 and 2015, the composition of the risk pool, the steadiness of enrollment growth, and competitive dynamics.”2

Furthermore, “the proposed rates for 2016 represent the first year where insurers are able to set premiums based on actual claims experience for marketplace enrollees. Even so, insurers only have annual data from 2014, which was incomplete (as most enrollees did not effectuate coverage until mid-year, whereas deductibles are annual) and not necessarily representative (as there was likely pent-up demand for health services among people who were previously uninsured).” Provider consolidation and the cost of prescription drugs are other reasons given for rate increases.3

What can you do before open enrollment?

You may not yet know what will happen to your health insurance premium in 2016, but you can start preparing for open enrollment and possible rate hikes. This is a wise practice regardless of premium changes. The health insurance plan that is best for you and your family this year may not be the best choice next year. Plus, plans and insurers exit and enter the marketplace each year, leaving you with different options.

  • Take stock of your current health insurance plan. What do you like about it that you would look for in another plan? What would make your coverage better? What is most important for you in a health insurance plan? 
  • Also take stock of your life situation. Have there been changes to your family size, health care needs and/or finances? Have you started taking new prescription drugs long-term? Are your network providers still convenient (keep in mind plan networks change from year to year)? Will you still be eligible for a tax credit?

Talk to a health insurance agent or broker about your health insurance options on and away from the state and federal exchanges. 

Uninsured? 

If you need health insurance coverage until your 2016 Obamacare coverage begins, you might consider short term health insurance for temporary benefits. Get a quote at healthedeals.com/temporary-short-term-health-insurance. If you have questions about health insurance plans—temporary or major medical—you can talk to an IHC representative by calling 888-839-7679. 

References

Centers for Medicare & Medicaid Services. “Public Review of Proposed Health Insurance Rate Increases for 2016 Coverage Year [Press Release].” June 1, 2015. http://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2015-Press-releases-items/2015-06-01-2.html

Centers for Medicare & Medicaid Services. The Center for Consumer Information & Insurance Oversight. “State Effective Rate Review Programs.” Last updated April 16, 2014. http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/rate_review_fact_sheet.html

Kaiser Health News. “KHN Morning Briefing: Insurers Seek Hefty Rate Increases For Obamacare Plans.” June 2, 2015. http://khn.org/morning-breakout/insurers-seek-hefty-rate-increases-for-obamacare-plans/


Centers for Medicare & Medicaid Services. “Public Review of Proposed Health Insurance Rate Increases for 2016 Coverage Year [Press Release].” June 1, 2015. http://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2015-Press-releases-items/2015-06-01-2.html

Cox, Cynthia, et al. “Analysis of 2016 Premium Changes and Insurer Participation in the Affordable Care Act’s Health Insurance Marketplaces.” The Henry J. Kaiser Family Foundation. June 24, 2015. http://kff.org/health-reform/issue-brief/analysis-of-2016-premium-changes-and-insurer-participation-in-the-affordable-care-acts-health-insurance-marketplaces/

Japsen, Bruce. “Obamacare’s Double-Digit Rate Hikes for 2016 Disclosed.” Forbes. June 1, 2015. http://www.forbes.com/sites/brucejapsen/2015/06/01/obamacares-double-digit-rate-hikes-for-2016-disclosed/

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About The IHC Group
The IHC Group is an organization of insurance carriers and marketing and administrative affiliates that has been providing life, health, disability, medical stop-loss and specialty insurance solutions to groups and individuals for over30 years. Members of The IHC Group include Independence Holding Company (NYSE:IHC), American IndependenceCorp. (NASDAQ: AMIC), Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company. Each insurance carrier in The IHC Group has a financial strength rating of A- (Excellent) from A.M. Best Company, Inc., a widely recognized rating agency that rates insurance companies on their relative financial strength and ability to meet policyholder obligations. (An A++ rating from A.M. Best is its highest rating.) Collectively, the companies in The IHC Group provide insurance coverage to more than one million individuals and groups. For more information about The IHC Group, visit www.ihcgroup.com.

About IHC Specialty Benefits, Inc.
IHC Specialty Benefits, doing business as Health eDeals Insurance Solutions is a full-service marketing and distribution company that focuses on small employer, individual and consumer products. Health eDeals markets products through general agents online, telebrokerage, advisor centers, private label and directly to consumers. For more information about Health eDeals visit www.HealtheDeals.com.