Senator John McCain is running TV ads on the theme that the Affordable Care Act aka “ObamaCare” is in dire straits, and like all Tea-Publicans, he wants to repeal the law. McCain has called premium increases on Affordable Care Act exchanges “astronomically high.” But are these growing premiums actually high?
The Washington Post reports, Skyrocketing Obamacare premiums still lower than employer-sponsored insurance:
A new analysis from the Urban Institute found that the average unsubsidized premiums in the Affordable Care Act exchanges, commonly known as Obamacare, are actually 10 percent lower than the full premiums in the average employer plan nationally in 2016.
Nationally, the average employer-sponsored premium was $516 a month, while the unsubsidized marketplace premium was $464. To make an apples-to-apples comparison, the researchers adjusted marketplace premiums to account for the age of enrollees and the different value of the health coverage provided by the marketplace plans.
The exchanges offer health coverage to people who aren’t insured through their jobs, with subsidies based on income. About 11 million people are insured through the marketplaces, compared with about 155 million Americans who receive insurance coverage through employer-provided plans.
Recent news of large insurance carriers pulling out of some states’ marketplaces and hiking premiums in others has raised concerns that offering health insurance through exchanges isn’t sustainable and the health care offered isn’t affordable.
But the Urban Institute researchers found that, in more than three-quarters of states and 80 percent of the large metropolitan areas they studied, total premiums were lower in an average marketplace plan than in employer-provided plans. For example, in Boston, the premiums for marketplace plans were 35 percent cheaper than employer plans. In New York City, marketplace plans were 26 percent cheaper than employer plans.
“It’s not that these markets are necessarily outrageously expensive — in the vast majority of cases they’re not,” said Linda Blumberg, a senior fellow in the health policy center of the Urban Institute.
However, most people who receive health insurance through their employers directly pay only a portion of the premium each month. The rest is paid by the employer, as part of workers’ compensation. And the majority of people who buy insurance on the exchanges receive tax credits that limit their premiums.
For people who are buying unsubsidized insurance on the marketplaces, that’s not the case.
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Premiums, overall, are going up on the exchanges. An analysis by the McKinsey Center for U.S. Health System Reform of rate filings in 18 states and the District of Columbia found that for a benchmark plan on the exchanges, the premiums would rise by 11 percent in 2017. A survey by the Kaiser Family Foundation found that premium increases in employer plans have been modest, with a family plan premium rising 3 percent in 2016.
The new findings suggest that it may be important to look at premium increases in context to understand which markets might face real problems with lack of competition or too many sick people signing up. Blumberg thinks that comparing marketplace premiums to employer premiums in the same areas might help flag areas where price increases are signs of a fundamental problem, distinguishing those from markets where premiums may be rising because insurers priced their plans too low initially.
Well, “context” would require John McCain to be honest about “ObamaCare” and to actually care about the program and the Arizonans who rely on it. That’s never going to happen.
According to healthinsurance.org, Arizona health insurance exchange / marketplace:
Rate filings for 2017 are currently under review by state regulators. The proposed average increases for plans sold in the exchange range from 19.2 percent (Cigna) to 51.2 percent (BCBS of AZ). At ACA Signups, Charles Gaba has calculated a weighted average rate increase of 49.3 percent for Arizona’s individual market, including plans available only outside the exchange.
Although the average proposed rate increase for Arizona’s individual market is certainly alarming, the impact won’t be as significant for people who are receiving premium subsidies, as long as they shop around during open enrollment to make sure they pick the plan that represents the best value in 2017. The 49 percent average requested rate increase for 2017 is before any subsidies are applied, and assumes everyone keeps their current plans (except for people whose plans will no longer be available in 2017, since they will have no choice but to pick a different plan). But when people shop around during open enrollment, the resulting rate increase is more muted.
For 2016, the average requested rate increase in Arizona’s individual market was 12 to 14 percent, but after plan selections were finalized during open enrollment, after-subsidy premiums for the 74 percent of enrollees with premium subsidies were actually lower than they were in 2015.
For 2016, the average pre-subsidy price in the Arizona exchange is $324 per month, but it drops to $120 per month after subsidies are applied. In 2015, the average pre-subsidy price was $278 per month; after subsidies, it was $123 per month. For the 26 percent of enrollees who don’t receive premium subsidies however, there’s no getting around the fact that premiums are higher in 2016 than they were in 2015, and will likely be considerably higher in 2017.
For the 26 percent of enrollees who don’t receive premium subsidies however, there’s no getting around the fact that premiums are higher in 2016 than they were in 2015, and will likely be considerably higher in 2017. But in 2016, Arizona has among the lowest rates in the country; of the 38 states that use Healthcare.gov, only one state — Utah — has a lower average pre-subsidy premium than Arizona, and Arizona’s average of $324 per month is well below the $396 per month average across all 38 states.
But John McCain wants you to believe that “ObamaCare” is a disaster and must be repealed, so that millions of Americans will lose their health insurance coverage. What Arizona really needs is John McCain to be retired in November.