Obamacare premiums will shoot up and health coverage will level off in 2017, once temporary (and costly) rate-cutting measures run out, according to a top health insurance economist.
Stephen Parente, a former health care adviser to Sen. John McCain’s 2008 presidential campaign and frequent Obamacare critic, projected health insurance enrollment under the Affordable Care Act for the next decade, the Washington Post reports.
It’s not until 2017 that Obamacare will fully hit its stride, owing to some provisions written into the health care law and a long list of delays that will (assuming there aren’t any further pushbacks) come due over the next several years. For one, the Obama administration’s unilateral extension of non-compliant insurance plans slated to be canceled will run out at the end of 2016. Parente believes between 4 million and 6 million of these customers will lose their coverage and be forced into costlier Obamacare plans.
On top of the delays, two of Obamacare’s most controversial provisions — the reinsurance and risk corridor programs — are set to end in 2016. The programs’ purpose is to act as a buffer for insurance companies in order to stabilize premiums while the industry gets used to Obamacare, assuming that insurers will adjust and the funding will run its course by 2017.
While the contentious risk corridor program, considered by many an insurer bailout, is supposed to be entirely funded by payments from insurers, the Obama administration recently issued a rule allowing for the federal government to spend taxpayer money to make heftier payments to insurers that incur losses in Obamacare exchanges. (RELATED: Obama Admin Rule Opens Door To Insurance Company Bailout)
The increased urgency to prevent premium hikes hints that insurers may be expecting to incur even heftier losses than originally projected — health care costs could rise even higher when the program runs out and insurers feel the full brunt of Obamacare regulations.
When the two risk adjustment measures do run out, Parente projects that health insurance premiums will rise drastically and will most significantly affect the lower-cost, less-inclusive Obamacare plans — most often purchased by those who can’t afford the expensive premiums of the best Obamacare plans.
Bronze health care plans, which are less inclusive but boast the lowest average premiums, will rise between $2,132 and $4,174 between 2016 and 2017, according to Parente’s estimates. By 2024, premiums bronze plans will more than double in some cases.
With the price of premiums rising, Parente expects enrollment to plunge accordingly. While risk adjustment provisions will keep premiums artificially lower over the next several years, Parente expects insurance rates to rise in the individual and employer-based markets as well as in Medicaid.
Over the ten-year window, the number of uninsured will actually rise, according to Parente’s analysis, from 36.5 million in 2015 to 40.4 million in 2024. After a drop to just 30 million uninsured in 2016, the economist predicts the number of uninsured Americans will shoot back up just one year later to 36.1 million in 2017.
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