The Affordable Care Act (ACA), which President Barack Obama once promised would “lower [health insurance] premiums by up to $2,500 for a typical family per year,” is instead going to cost the average family significantly more for coverage next year unless that family switches to another plan — and even then, in many instances, premiums will still increase. So will the penalty for not having coverage, meaning that many Americans will be faced with the unenviable choice of either paying higher premiums or getting smaller income-tax refunds.
Certainly the Obama administration doesn’t consider the rate hikes a positive. Centers for Medicare and Medicaid Services administrator Marilyn Tavenner’s assertion that the data shows “the Affordable Care is working” notwithstanding, the administration wouldn’t have released that data on Friday, when it would likely get buried in the weekend news cycle, if the White House had wanted to call attention to it.
According to the New York Times, “The data … indicates that price increases will be modest for many people willing to change plans. In a typical county, the price will rise 5 percent for the cheapest silver plan and 4 percent for the second cheapest.” In other words, even if an individual is willing to change plans, his rate will go up — just not as much as it would if he stuck with the same plan.
The paper cited one example based on its analysis of the data:
A 40-year-old in Nashville, with the cheapest midlevel, or silver plan, will pay $220 a month next year, compared to $181 a month this year, for the same plan.
The least expensive plan is offered by another insurer, Community Health Alliance, one of the so-called co-op plans created under the federal law. It offers coverage for a monthly premium of $194.
But the lower premium means that consumers will have to pay a much larger annual deductible, $4,000, rather than $2,000. A policyholder who becomes seriously ill or has a costly chronic condition could pay hundreds of dollars in out-of-pocket expenses.
Other cities and states may not be as fortunate as Nashville. Those with fewer insurers in the exchange can expect steeper rate hikes even for those who change plans. “Prices for the lowest-cost silver plan increased by at least 5 percent in 89 percent of the counties with a single insurer,” the Times found. “About a quarter of counties with one or two insurers saw an increase in rates of more than 10 percent.” That’s because many of last year’s low-cost providers are raising their rates significantly this year (suggesting that many of their new beneficiaries are, as critics predicted, costly to cover), and unless competitors are rushing into an exchange with lower premiums, consumers have little choice but to pay up.