Despite Hefty Premium Hikes Most Obamacare Enrollees Will Be Able To Find Very Affordable Plans

The New York Times has a front page story today that opens with the sentence, “Premiums for midlevel health plans under the Affordable Care Act will increase by an average of 25 percent next year, while consumers in some states will find significantly fewer insurance companies offering coverage, the federal government said Monday.” It isn’t until you get far down in the article and to its continuation on page 18 in the print edition that you find out this only applies to those people on the federal exchange. As Dean Baker points out, these increases will apply to about two-thirds of the people on Obamacare which amounts to just 3% of the total population. Additionally, health care costs per insured person have fallen dramatically in the last five years and, even after these increases, premiums will almost exactly in line with the original CBO estimates.

The variation of rate hikes across all states is kind of astounding, whether they are on a state-run exchange or the federal one. In California, premiums are expected to rise by only 7% and in Massachusetts they are  actually going to fall by 3%. On the other hand, rates are expected to rise by 145% in Arizona and many states with smaller populations are seeing increases of 50% or more. These increases will not affect a majority of those insured under Obamacare as nearly 85% of the people enrolled receive some kind of assistance and nearly three-quarters of enrollees will be able to find a silver plan for an out-of-pocket cost of less than $100 per month. Lastly, it is important to remember that Obamacare is essentially a high-deductible catastrophic health care plan. If every enrollee chose the lowest priced bronze plan, premiums would drop by about 20%.