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2017 Obamacare Rates: Requested Rates Up 20%, But Final Rates Expected to Be Lower

Charles Gaba is a healthinsurance.org contributor and founder of ACAsignups.net site designed to track the Affordable Care Act enrollments since 2014. According to Gaba’s blog titled, Presenting the ACA Signups 2017 Requested Rate Hike Challenge!!, requested rates from each state average just over the 20 percent mark. Previous annual reports tracked the difference between the requested rate and the actual rate imposed.

Premium Rate Requests and Approval

2016 projections started at 12 to 13 percent nationally and were estimated to reduce to 9 percent. Once the requests were processed and adjusted, they ended up being 11.6 percent nationally, while the approved average ended up at 8 percent.

The data received by mid-June for 35 states as well as DC, currently represents 79 percent of the population with a 21.67 percent increase requested. Approval numbers are expected to be less, nationally, due to the numerous filings of each state. Requests have to be justified by regulators and the data history has shown that it often leads to rather large decreases from the original request to the actually approved numbers.

As the last few states are added to the data, national numbers are not expected to change very much and the estimate will still hover around the 22 percent range. The current estimate on approval of the requested changes is closer to 18 percent nationally, and effective rates based on full policy premium price should reduce to 14 percent by next spring. Data continues to be pulled and adjusted throughout the year.

These projections do not take into account the co-pays, deductibles, or provider network structure. It is based on 100 percent of enrollees auto-renewing their current plans, then weighted based on qualifying health plans and population in each individual state.

Example of Changes from Requested to approved Rates:

Anthem Blue Cross and Blue Shield health plans serve 55,000 people on Connecticut’s individual market. It is approved to rise by an average of 2.4 percent next year. The insurance company, ConnectiCare has 34,400 customers with an average rate increase of 8.5 percent. They both requested higher rate increases, but the Connecticut Insurance Department regulators felt they were unwarranted and forced revisions to initial proposals.

Another company, Golden Rule, covering 3,414 people, requested an 18.5 percent hike that was knocked down to only 1.1 percent.

Overall, whether products were purchased on or off the marketplace, the average was only a 3.5 percent increase on the individual market. The small group market did even better at a 2.9 percent reduction.

Final Rates Versus Subsidized Rates

Keep in mind that the approved final rates are dramatically different between the full price for those above 400% of the Federal Poverty Line (FPL) and subsidized rates.

Example of Tax Credits Impact:

Most Florida residents still get coverage from employer plans or government programs such as Medicare, but roughly 1. 7 million purchased from the Obamacare marketplace plans in 2016.

About 91 percent qualified for tax credits. The average monthly full-price premium was $386. After the credits were applied it was reduced to $84 with only a 2 percent increase from the prior year.

Benchmark Basis

Benchmark pricing for the marketplace plans refers to the base rate of the metal categories (bronze, silver, gold) used to determine the ACA’s Advance Premium Tax Credit (APTC). The variation of these rates is actually more important than the change in other premium rates because these determine the amount of the federal tax credit being given.

If the benchmark policy rate in your area changes, it will change your tax credit formula and amount of credit received even if your income level, household dependents, policy type, and premium are the same. The Kaiser Family Foundation website shows how this worked from 2015 to 2016. Inquire about changes to base plan rates and compare pricing before auto-renewing annually.

It is clear, estimates based on requests by each state are far from the approved numbers and in many cases, much less. The final stated premiums are based on the full price before the tax cuts or subsidies are applied, and new benchmark base plan pricing encourages shopping for the best price each year regardless.

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Five Ways Hillary Clinton Will Improve Obamacare

As election coverage continues for the 2017 presidential race, we will certainly be hearing more regarding healthcare coverage. Hillary has made us all aware that she will continue to expand the current Obamacare coverage because she believes in the results. She believes the ACA law is directly responsible for 16 million additionally insured people, many of whom are young, have pre-existing conditions, and are women who were not receiving the coverage or care the deserved.

To achieve her goals, it requires more government influence to oversee processes in the health insurance industry and medical facilities in order to maintain compliance with the laws, greater stimulus for services to continue the growth of the Medicare Advantage and Medicaid programs, and a move toward centralization of services similar to a single-payer system.

  1. Clinton will continue to enforce the existing law requiring health insurers to disclose costs of medical services, claims payment processes, and quality data to consumers. She will block or modify health insurance rate increases if they are found to be unreasonable. Hillary talks about tax credits of up to $5,000 per family intended to offset some of the excessive out-of-pocket and premium costs if they go above 5% of their income. This is in addition to ensuring that families buying health care coverage on the exchange will not have to pay more than 8.5% of their household income for premiums.
  2. She extends these out-of-pocket costs and premium restrictions to include the family glitch created when employers’ coverage exceeds the cost of health care marketplace coverage. Further, she includes three sick visits a year without having to meet a deductible. She is very aware that deductibles have tripled in the last 10 years while copays have continued to rise and proposes to reduce these costs. Self-insured employers, including hospitals, will need to partner with national insurers to control the payroll contribution costs of insurance and work toward true cost reduction rather than simply shifting risk from employers over to consumers.
  3. Emergency services will not be subject to additional costs because they were not provided by a participating network provider. Fees to the hospital and physicians will be the same if it is a true emergency. High health care costs keep people out of the hospital when they really need help and that goes against the purpose of providing the coverage in the first place.
  4. Clinton wants to expand Obamacare and the incentives to states to expand Medicaid coverage. This includes adding a public option to choose between government offered and privately offered coverage, providing health care to all residents regardless of immigration status, and expanding the delivery system and technology for plans available through exchanges. Innovations in the delivery system can increase efficiency and maintain more accurate and accessible records. There will be rewards offered to insurers and providers contributing ideas for increased quality, consumer experience, and cost control.
  5. Hillary will improve the value of Medicare and Medicaid coverage by standardizing the evaluation and improvement process. This means insurers need to work with large regional providers and America’s Health Insurance Plans (AHIP) which is part of The Core Quality Measures Collaborative (CQMC), along with many national physician organizations to remove poor quality hospital and physician services from networks and produce information to positively affect each facility’s business practices, cost, and patient satisfaction.

These five areas listed encompass many parts of the existing healthcare system and ACA law. Hillary Clinton’s election coverage will also show concerns for defending women’s rights for access to full healthcare, greater initiatives in autism research, Veteran’s health care, children’s vaccines, and the need for more research into the use of medical marijuana. Many of her enterprises go beyond the United States to become global health concerns as well. Overall, she wants greater culpability and better availability of health care and services and lower costs without disrupting Obamacare’s momentum. There is a continual need for improvement and she is focused on the parts of the law that need revising and expanding but with the same goal in mind: universal affordable healthcare coverage for all US residents.

Resources and Links:

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ACA enrollment figures boosted by Young Invincibles

With the third Open Enrollment Period (OEP) having come to an end, things have gone very smoothly. As of Jan. 23, 2016, a total of 11.6 million Americans had either signed up for Affordable Care Act (ACA)-compliant health insurance plans or renewed their coverage. This OEP also marked an enrollment experience relatively free of problems.

The 2016 OEP is also notable for having attracted large numbers of, younger, healthier consumers. These millennials (18-34 years old) are favored by the large insurance carriers that comprise about half of all Obamacare policies. With fewer older, sicker enrollees, plan premiums are typically reduced for all members. The increases in younger, healthier consumers should also enable the healthcare law to succeed in years to come.

An upswing ends 2016 enrollment

With the OEP’s closing, the only way to still obtain coverage is through a Special Enrollment Period (SEP), offered by the government. Or, you may be offered a personal SEP if specific life changes, known as Qualifying Life Events (QLEs) (e.g. marriage, childbirth, loss of coverage), occur. Those without ACA-compliant coverage may face tax penalties (the individual mandate); the 2016 amounts are substantially higher last year’s, although hardship exemptions may be available. If found liable, consumers will have to pay the greater of:

  • $695 per adult and $347.50 per child, for a maximum of $2,085 per family, compared to 2015’s $325 and $162.50
  • 2.5 percent of your income above the tax filing threshold, compared to 2015’s 2 percent

While these penalties are a major financial burden, they have persuaded Americans to purchase health coverage. By the OEP’s 12th week (Jan. 17-26, 2016), the Centers for Medicare and Medicaid Services (CMS), the agency overseeing the ACA, calculated an estimated 8.9 million sign-ups in the 38 states utilizing the government’s HealthCare.gov platform. And with state-run exchanges (and the District of Columbia) included, the current tally of plan sign-ups and renewals increases to 11.6 million.

Some states (and the District of Columbia) with their own exchanges are offering enrollment extensions. For instance, both Covered California and The Maryland Health Connection have extended their deadlines until Feb. 6. While extensions were provided in past years, due to technical issues and other issues, the OEP saw few problems. In fact, the Obama administration reported that there will be no official SEP in 2016.

Millennials smoothing out the risk pool

Of these sign-ups, the CMS found that 2.1 million 18-34-year-old consumers – also known as Young Invincibles (YIs) — had purchased coverage by Dec. 15, 2015. For this time in 2015, 1.1 million in this age range had purchased coverage. This offers evidence that the ACA’s continued efforts to draw enough YIs to balance out the risk pool is succeeding. Insurance carriers feel that this age group is generally healthier than older members, thereby increasing profits and decreasing medical costs for the coming year.

But these lower costs and happier carriers are expected to make Obamacare financially stronger in years to come. “Having people of good health participating in the marketplaces will contribute to the long-term financial stability of those marketplaces,” stated White House Press Secretary Josh Earnest. “That’s why that was a focus of our efforts, and the early indications are that those efforts were successful.”

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Missed Open Enrollment? Here Are Two Great Options

Open Enrollment for 2016 has ended. However, if you missed the deadline you still have options:

Get a cheaper alternative to Obamacare with Short-Term Insurance.

What is Short-Term Health Insurance? Short-term insurance is great if you:

  • Need coverage and Open Enrollment has ended
  • Need coverage immediately (coverage can start the next day)
  • Don’t have a pre-existing condition
  • Don’t have a qualifying life event
  • Need a plan for less than 12 months
  • Acknowledge that you understand that short-term plans do not comply with the individual mandate under the law

Plans can start as low as $50 per month.

View Short-Term Plans

 

If you had a “qualifying life event” you can still enroll in Obamacare/ACA insurance and receive subsidy discounts.

What does this mean? If you had a “Qualifying Life Event” you are allowed to enroll in health insurance outside of the Open Enrollment period. If you experienced one of these events in the last 60 days, you can enroll in a plan up until the 60th day after the event occurred:

  • You got married or divorced
  • You had a child or adopted a child
  • You turned 26 yrs old and will lose coverage on your parent’s plan
  • You lost health coverage from your job
  • You moved locations and your insurance is no longer offered
  • You had a change in income (and are now eligible for a bigger or smaller subsidy)
  • View more Qualifying Life Events
View Obamacare Plans

 

 

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