North Carolinians enrolled in the Affordable Care Act saw their health insurance premiums jump 30 percent or more this year, but ACA officials said Tuesday that the real increase was much less: 3 percent.
Obama Administration officials in the U.S. Department of Health and Human Services issued their own health insurance cost data to counter predictions that ACA rate increases will likely be in the double digits in 2017.
The debate over the ACA’s effect on health insurance costs is heating up again as health insurers around the country are submitting proposed rates to state insurance regulators. The figures provided by ACA officials are likely to become a flashpoint for ACA critics and impartial analysts in that debate.
“It shows what they’re paying in premiums, which isn’t everything,” said health care analyst Cynthia Cox of the independent Kaiser Family Foundation. “It doesn’t show the tradeoffs that people may have to make.”
One of the key tradeoffs are deductibles. Cox said the analysis from the federal agency doesn’t show how much people are paying in deductibles, which have been rising sharply. From 2015 to 2016, deductibles went up about 20 percent on average nationwide for ACA “silver” plans, the most popular in the system.
For example, some ACA plans available in Wake County from Blue Cross and Blue Shield require customers to pay as much as $6,850 out of pocket before the health insurer takes over.
In North Carolina, customers and regulators are bracing for steep rate increases. Blue Cross and Blue Shield, which has lost $405 million on ACA plans in the past two years, expects to announce its proposed ACA rates for 2017 later this month.
Last year, the N.C. Department of Insurance approved an average 32.5 percent rate increase for Blue Cross in 2016, among the highest rate increases in the nation. Blue Cross, the state’s largest health insurer, is one of three insurers offering ACA plans in North Carolina, and the only one in all 100 counties.
If Blue Cross is dissatisfied with the rate approved by the Department of Insurance later this year, it could decide to scale back its ACA coverage in North Carolina or exit the market entirely.
United Healthcare, the nation’s largest health insurer, last month announced it will withdraw from most ACA markets, including North Carolina. As of January, the insurer covered 158,379 people on individual health insurance plans in North Carolina.
ACA officials said Tuesday the double-digit rate increases that end up getting publicized are merely initial proposals from health insurance companies, not final approved rates. They noted that customers who buy coverage through ACA marketplaces often qualify for subsidies, slashing their monthly costs. Each year customers also shop around and switch to cheaper policies to reduce their costs further.
The end result is that the double-digit increases trumpeted by ACA critics are a myth, ACA officials said.
After premium subsidies are factored in, the average monthly premium in North Carolina is $98 this year compared to $95 last year. Of the 613,487 people enrolled in ACA plans, 89 percent qualify for a federal subsidy to bring down their costs.
The average monthly premium in the state is $497, and the average monthly subsidy is $399, resulting in a reduced cost of $98 for the policy holder, up from $95 in 2015. That translates to an increase of just $3 a month. The national average is $4 a month, according to the HHS analysis.
However, in calculating the $98 monthly rates, ACA officials counted only the 546,000 enrollees in the state who receive subsidies. The subsidies are available to people whose household incomes are between 100 percent and 400 percent of the federal poverty level.
The 67,000-plus people enrolled in ACA plans who pay full premiums, without financial assistance from the federal government, were left out of the calculation.
Some enrollees who are buying coverage for an entire family are paying well over $1,000 a month for health insurance in Wake County. One such policy for a family of 4 comes with a $500 deductible, a $1,000 out-of-network provider deductible and a $200 prescription deductible.