A new report from the Obama administration finds that ObamaCare premiums rose 8 percent last year, pushing back on warnings of larger price hikes.
The Department of Health and Human Services (HHS) report released Tuesday finds that ObamaCare premiums rose 8 percent on average — from $356 a month to $386 a month — from 2015 to 2016.
Once the ObamaCare tax credits that help 85 percent of consumers afford their plans are factored in, the average premium increase was even smaller: $102 to $106, or 4 percent.
The report fights back against predictions, often seized on by Republicans, that ObamaCare premiums would spike by double-digit percentages. HHS notes that such predictions often do not take into account that consumers can shop around and change plans so as to find the best deal and that tax credits help lower the burden further by shifting more of the premium cost onto the government.
In other words, while some insurers did spike premiums by double-digits last year, consumers can often switch into a different plan or get help from a tax credit so that they don’t necessarily have to pay that increase.
The report’s timing comes as insurers are preparing to file their proposed premium rates for the ObamaCare marketplaces next year, a period that often sets off warnings about price spikes.
HHS is trying to get out in front of the turmoil.
“Over the next few months, insurers will file preliminary individual market rates with their states’ insurance regulators,” the department said in a blog post Tuesday. “Marketplace consumers would do well to put little stock in those initial numbers.”
The post adds that the new report “debunks the myth” of double-digit premium increases.
However, there still are some warning signs for the coming year. Insurers have been pounding the drum to make clear that in most markets they are still losing money on the ObamaCare marketplaces, a point that could help them try to justify substantial premium increases next year.
Some insurers are even talking about dropping off the ObamaCare marketplaces entirely because of financial losses.
UnitedHealth, which in November warned of doing just that, last week announced that it is dropping out of the marketplaces in Georgia and Arkansas. More states could follow.