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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.
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.
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.
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
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.
Talk to a health insurance agent or broker about your health insurance options on and away from the state and federal exchanges.
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.
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/
1 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
2 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/
3 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/
SHORT-TERM MEDICAL EXPENSE (STM)
THIS IS A SHORT TERM HEALTH BENEFIT PLAN THAT IS NOT INTENDED TO QUALIFY AS THE MINIMUM ESSENTIAL COVERAGE REQUIRED BY THE AFFORDABLE CARE ACT (ACA). UNLESS YOU PURCHASE A PLAN THAT PROVIDES MINIMUM ESSENTIAL COVERAGE IN ACCORDANCE WITH THE ACA, YOU MAY BE SUBJECT TO A FEDERAL TAX PENALTY. ALSO, THE TERMINATION OR LOSS OF THIS POLICY DOES NOT ENTITLE YOU TO A SPECIAL ENROLLMENT PERIOD TO PURCHASE A HEALTH BENEFIT PLAN THAT QUALIFIES AS MINIMUM ESSENTIAL COVERAGE OUTSIDE OF AN OPEN ENROLLMENT PERIOD. THIS POLICY INCLUDES A PRE-EXISTING CONDITION EXCLUSION PROVISION.
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