It’s that time again, Open Enrollment for health insurance. It’s time to make one of the most important yearly decisions you have to make. And the clock is ticking; you have until December 15th to make a final decision. Although, if you live in one of the 12 states that operate their own exchanges, then you have a little more time beyond that.
We all have experienced the increases in the cost of health care before. You have an expectation that 2018 would be no different. And you are right. You have also heard that this year will be a bit different than last year and the burning question that is on everyone’s mind is, “How much will insurance cost me this year?”
Insurance Rates Have Increased Since 2014
It seems that insurance rates are always on the incline. The increase this year over last year is not something new. Since the Affordable Care Act was written into law in 2014, those seeking insurance have seen a dramatic increase each year. A recent study by Kaiser Family Foundation has reflected an average increase of up to 28 percent over that time period. This study was conducted for 21 major cities across the U.S.
According to their findings, the state you live in could affect your cost of insurance. The KFF revealed that some states have a greater increase than others. The 28 percent average increase came from Tennessee. In Georgia, their average increase was just 5 percent; Washington had a 2 percent average increase, while Delaware experienced an average 22 percent increase. It goes to show; where you live matters in determining insurance rates.
Factors that Will Determine Health Insurance Costs for 2018
How much insurance rates will increase in your state in the future is still up in the air for most insurers. With questions surrounding the funding of cost-sharing reduction payments and the easing of the individual mandate law. Let’s take a quick look at each of these and how they impact the cost of insurance for 2018.
Cost sharing reductions are basically a discount toward your health insurance. The reduction helps lower the amount you have to pay for deductibles, co-payments, and co-insurance. You must, however, qualify for this “extra savings.” You will find out if you quality during your application process. There are two ways to save on your insurance.
Premium Tax Credit -this discount will be based on your income and household information you put on your application. It can lower your monthly premium, and you can use it in any plan category.
Extra Savings -this discount is in addition to the Premium Tax Credit. In addition to the premium savings, you will also have a lower out of pocket maximum. These are a combination of, as discussed earlier, your deductible, co-insurance, and co-payments. If you qualify for the Extra Savings portion, you will be limited to purchasing a health insurance
How this basically works is that under the Affordable Care Act, insurance companies are required to offer low-income families these discounts to ease the cost of insurance. The government has been giving reimbursement payments to the insurance companies that offer these discounts to the consumer.
Current regulation is now in play to remove the reimbursement payments to insurance companies, but the mandate to offer low-income plans would still exist. To recoup the amount insurance companies received from the federal government, they increase rates to get that amount from the consumer. Lower anticipated enrollment is expected if:
The plans keep increasing, and there is no reimbursement of expenses the insurance companies are paying.
The individual mandate is eased. Fewer people will enroll with the threat of tax penalty looming over their head.
With increased costs, insurance companies are forced to either increase rates to compensate, or pull out of the marketplace altogether. Insurance would become too expensive or unavailable. The lack of enrollees also drives up the cost of insurance due to the cost of insurance being spread over fewer individuals.
The Outlook for 2018
Insurers are panicking and increasing rates to cover lost funding for their mandated subsidies and the threat of fewer people enrolling. Those costs are being pushed onto the consumer. CNBC reports on an analysis done by Avalere stating a premium increase of 34% on average on plans in the Silver category.
These factors have caused states like Florida to announce their rate increase of 45 percent for 2018. New Mexico says their exchange increases will range from 36 to 41 percent. So, it is expected that wherever you live in the country, you can expect an increase of some sort. With the uncertainty of the future health insurance and how it is funded, or regulated, you can expect to see these increases from year to year.
Get the latest information on insurance rates at buyhealthinsurance.com, or contact one of our knowledgeable representatives at 1800-793-3803.