Will Obamacare Premiums Skyrocket?

Christopher Flavelle in Bloomberg: One of the most persistent arguments against Obamacare has been that the cost of coverage on state exchanges will skyrocket. Figures released Monday by the U.S. Centers for Medicare and Medicaid Services, listing average 2016 premium increases for the 37 states whose exchanges are run by the federal government, suggest that argument just isn’t true.

Yes, some of those states will see eye-popping increases: a 36 percent jump in Oklahoma, for example, and a 32 percent rise in Alaska. But in other states, the average cost of the so-called benchmark plan (the second-cheapest silver plan in a given geographic area) will fall — by 13 percent in Indiana, 8 percent in Mississippi and 1 percent in Ohio. On average, benchmark premiums will go up by just 7.5 percent.”

But, as Gaba points out and Politifact noted recently, the averages also mask a lot of variation. Some insurers are raising premiums more modestly and others are actually reducing rates. People faced with increases can, and frequently will, find cheaper alternatives.”

For these reasons, many analysts think the best indicator of how premiums are changing is to compare the price of the second-cheapest “silver” plan in 2016 to the second-cheapest silver plan of 2015. According to an analysis that HHS released on Monday, the difference is just 7.5 percent — and that’s before taking into account the tax credits that could wipe out some or all of the increase for many consumers. With those tax credits in hand, HHS says, most people buying coverage on the federal or state marketplaces can find insurance for less than $100 a month.

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