Premiums for health plans sold through the federal insurance exchange could jump substantially next year, perhaps more than at any point since the Affordable Care Act marketplaces began in 2013.
An early analysis by the Kaiser Family Foundation shows that proposed rates for benchmark silver plans — the plans in that popular tier of coverage that determine enrollees’ tax subsidies — are projected to go up an average of 10 percent across 14 major metropolitan areas.
The analysis, released Wednesday, is based on insurers’ initial filings in 13 states and the District of Columbia. As in previous years, it shows how differently the health-care law is playing out across the country depending on regions and insurers.
Only in Providence, R.I., and Indianapolis would monthly premiums for the second-lowest-cost silver plans drop. Increases would range sharply, from 4 percent in Albuquerque to 16 percent in the District and 18 percent in Portland, Ore.
Overall, the benchmark plan premium in these cities would rise twice as much on average as the increase last fall.
Insurers have been warning that premiums could spike by double-digit percentages in 2017 — and several plans have raised the specter of rate increases of 50 percent or more.
Insurers blame enrollees, saying they are sicker than companies had expected they would be when setting rates in the health-care law’s first two years.
Larry Levitt, a senior vice president at the foundation, characterizes 2017 as a “market correction year,” with companies trying to position themselves to make money over the ACA’s long haul.
“The biggest things going on here are that insurers initially guessed wrong,” Levitt said. “They had to guess how many people [would enroll] and how much health care they would use. And insurers mostly guessed wrong, and now insurers are playing catch-up.”
Another factor is the winding down of a government program that helped insurers cover the cost of very expensive patients. It will end in December.
Cost concerns have caused several companies to withdraw from the exchanges next year, most notably UnitedHealthcare. In addition, financial problems forced the closure of more than half of the nonprofit insurance co-ops created under the law.
Those departures and shutdowns are why consumers in half of the 14 marketplaces will see a net decrease in the number of participating insurers, according to the Kaiser analysis.
“This is just the beginning of the rates process,” a spokesman for the Health and Human Services Department said Tuesday. “Proposed rates aren’t what most consumers actually pay because the vast majority of consumers qualify for tax credits that reduce the cost of coverage below the sticker price, and people can shop around and find coverage that fits their needs and budget.”
A statement from the DC Health Benefit Exchange also stressed that the premiums put forward so far have a long way to go to approval. “We advocate for the lowest possible rates, and our independent actuaries are reviewing,” the statement said. “We will be providing our analysis advocating for lower rates to the [D.C.] insurance department.”
Federal and local health officials emphasized the shop-around point last fall, saying consumers who did would be able to find affordable plans — especially because so many are eligible for premium subsidies.
The new analysis echoes that, noting “the vast majority of marketplace customers who receive premium subsidies under the health law would be protected from premium increases if they shop around and choose one of their market’s lowest-cost plans.”
It cautions, however, that switching plans can be very disruptive because it may mean switching insurance companies as well as doctors.
All states review rates, but only some have the power to change what insurers propose. It is anyone’s guess whether plan premiums might help re-ignite political debate over the ACA and health-care costs; final rates will be public not long before the November elections.
Open enrollment for 2017 starts Nov. 1 and closes Jan. 31.