Obamacare Insurers Propose 12% Average Rate Increase for 2016

People with health insurance policies bought through government exchanges may face a double-digit rate increase next year.

Insurers are proposing an average 12 percent jump in prices for policies set up under the Patient Protection and Affordable Care Act, or Obamacare, according to a survey of 3,771 plans in 45 states by HealthPocket Inc., a health insurance research and advocacy group. That compares with a 5.4 percent average hike this year from 2014, according to research by PricewaterhouseCoopers LLP.

The proposed increases vary, depending on the plan. The most popular are silver level, with 14 percent higher premiums proposed for next year on average. Gold and platinum plans, which tend to have higher premiums and lower co-pays, averaged 16 percent and 6 percent, respectively. Entry-level bronze plans averaged 9 percent increases.

Higher premiums in 2016 may pose a significant challenge to President Barack Obama’s signature domestic achievement, causing some people to drop out of the insurance exchanges. About 10.2 million Americans currently are covered by Affordable Care Act policies, the Centers for Medicare & Medicaid Service said earlier this month. About 1.5 million have dropped their coverage this year.

Along with the proposed double-digit rate increases, about 6.4 million of those covered could risk losing subsidies to help pay for their plan. That depends on the Supreme Court’s ruling in King v. Burwell, a case scheduled to be decided this month.

“A principal concern is whether these rates are affordable in the potential absence of subsidies,” Kev Coleman, head of research and data at HealthPocket, said Wednesday in a statement.

The proposed rate increases aren’t the final word on actual premium costs for next year. Health insurers generally are required to submit increases of more than 10 percent to the state or federal government for approval, though some states may set different thresholds. Regulators look for “reasonable cost assumptions and solid evidence,” according to HealthCare.gov.

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