Obamacare Prices Will Increase 15 Percent Next Year

Premiums for health insurance plans that people purchase through the Obamacare marketplaces are expected to rise by an average of 15 percent in 2019, largely due to changes Republicans and the Trump administration have made to the Affordable Care Act, according to a report released by the nonpartisan Congressional Budget Office (CBO) yesterday.

The CBO analysis said one particular move—nixing the requirement that all Americans have health insurance or face a tax penalty, which was part of the $1.5 trillion GOP tax bill Trump signed in December—is responsible for about a 10 percent increase in premiums alone. The other factors contributing to the increase are the Trump administration's move to cut off cost-sharing reduction payments (CSRs) to insurers, which the White House ended in October, and rising healthcare costs overall, the CBO said. Insurers in several states are already seeking double-digit rate hikes.

Eliminating the requirement that everyone have health insurance, aka the individual mandate, means that insurance companies expect to see healthy people forgoing coverage and leave people with higher healthcare costs in the marketplace. Ultimately, the report said, there would be 3 million more people without health insurance in 2019 than in 2018.

Increases in premiums, or the monthly amount you pay for an insurance policy, don't affect the majority of people who buy their insurance through the Obamacare market because people with lower incomes get tax credits that are tied to the price of plans in order to help them afford coverage. When premiums go up, so do their tax credits. People with incomes between 100 percent and 400 percent of the federal poverty level (FPL) are eligible for these tax credits, but that leaves many middle-class people with no relief.

For example, if you're a single person who doesn't get insurance through work and makes more than $48,560 a year, which is 400 percent of the FPL, you have to pay full price for a health plan. And prices have been increasing in recent years: The CBO report noted that premiums in 2018 were 34 percent higher than in 2017. One analysis noted that, as a result of repeal of the individual mandate and by allowing more people to buy short-term health plans, the annual cost of a plan for a 40-year-old would increase by $1,013 in 2019 before any tax credits.

Final insurance prices for 2019 won't be set until the fall, about a month before the midterm elections, so you can expect to hear a lot more about this as people hit the campaign trail.

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