The good news on ObamaCare premiums is history, the Congressional Budget Office signaled Monday, predicting nearly double-digit rate hikes in each of the next three years. Premiums will rise an average 8.5% annually over 2016-2018, the CBO projects, as the government phases out a temporary program reimbursing insurers for some expenses incurred by their highest-cost patients.
The budget office also expects upward pressure on premiums as insurers, facing push-back on some of their aggressive pricing strategies, may "not be able to sustain such low provider payment rates or such narrow networks."
While higher rates won't deter those who qualify for subsidies, they pose a problem for those who are ineligible and who so far exhibit much less interest than expected in ObamaCare plans offered via Healthcare.gov or the state exchanges.
Unsubsidized Don't Sign Up
Of the 8.8 million people who signed up for 2015 coverage via Healthcare.gov through Feb. 22, 87% qualified for premium tax credits, Health and Human Services Secretary Sylvia Burrell said Monday, leaving just 13% of the group unsubsidized.
Covered California, which accounted for almost half of all signups on state exchanges, said last week that 90% of its customers qualified for subsidies.
For both Healthcare.gov and California, the subsidized share actually increased in 2015, contrary to expectations. Nationally, the CBO projected that unsubsidized enrollees would triple from 1 million in 2014 to 3 million in 2015. Yet, based on incomplete information available from other state exchanges, it now looks like about 1.7 million unsubsidized people selected ObamaCare exchange plans, and that number may dwindle as those who don't pay drop out.
After seeing preliminary signup data, the CBO cut its 2015 enrollment estimate from 12 million to 11 million, so the entire shortfall seems to come from those who pay full freight.
The government is still hoping for more unsubsidized signups as the individual mandate affects uninsured Americans during the current tax filing season.
While subsidies are officially available to individuals earning up to 400% of the poverty level, the actual ceiling can be much lower.
Take a 40-year-old single person earning $35,010, or 300% of the poverty level, this year. The Kaiser Family Foundation health subsidy calculator shows that on the benchmark plan, the second lowest-cost silver, he would have to kick in as much as 9.56% of income, or $3,347, with the government paying any cost more than that amount. But the man's plan actually costs less: $3,312. So the government would not have to chip in anything.
Read More At Investor's Business Daily: http://news.investors.com/politics-obamacare/030915-742654-obamacare-premiums-to-jump-enrollment-subsidy-heavy.htm#ixzz3TwHxVwdP
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