The premiums for lowest cost silver plans available on the federal ObamaCare exchange have jumped by 10 percent, according to an analysis conducted by Avalere Health, a consulting firm that generally advocates for the law.
Premiums for 2014 health plans on the individual market jumped substantially compared to pre-ObamaCare rates. This was due to several mandated benefits, taxes and fees as well as significant regulatory changes, such as the age-rating restriction, which prohibits insurers from charging older consumers more than three-times what younger policyholders pay.
Unsurprisingly, however, premiums are still on the rise, largely a result of too few low-risk consumers, higher utilization of coverage by older policyholders, and a lack of insurers participating on the federal exchange. The so-called "administrative fix" for some canceled health plans is also to blame.
The Centers for Medicare and Medicaid Services released premium data for health plans available on the federal exchange the day before the launch of the second open enrollment period. The New York Times reported that the consumers could face premium increases as high as 20 percent unless they switch plans.
Twenty-eight percent of consumers purchased the lowest cost silver plan during the first open enrollment period, making it the most popular on the federal exchange. On average, according to the analysis, these consumers will see premium increases of 10 percent if they don’t login to HealthCare.gov and pick a new plan. If they don’t, they’ll be automatically re-enrolled for next year.
Another complication for consumers is the benchmark health plan on which subsidies are calculated — the second-lowest cost silver plan — is changing in most areas of the country, which could lead to them to see more of the true costs of their pricey ObamaCare coverage.