Health insurance premiums under Obamacare are rising in a boatload of states, but HealthCare.gov customers will be faced with a laundry list of glitches and changes that could result in hiked premiums on top of that, according to new research from the American Action Forum.
There’s a big problem with the health-care law’s regulations hiking the actual cost of health insurance for many people. Premium rates are rising because policies are required to be more inclusive, whether the customer wants extra servivces or not. But on top of rising prices, there are seven policies on the federal Obamacare exchange itself that can cause even bigger premium hikes next year.
Partly to blame, according to the free-market think tank’s health policy analyst Angela Boothe, is that on HealthCare.gov, many customers just aren’t guaranteed a certain price for their health insurance.
In a private market, an insurance company charges its customers a set price. But in Obamacare exchanges, the federal government can change what they’re charging many customers after the fact — especially if the customer is one of the 85 percent of federal Obamacare sign-ups receiving a subsidy.
One culprit is an ongoing mismatch between Obamacare applications and federal data. When it comes to premium subsidies, errors can result in effective premium increases — owing the IRS money back at tax season.
With 2015 enrollment just one month away, some customers are still struggling to find out what they owe for their 2014 insurance plans. The administration set a deadline of Sept. 3o to verify customers’ reported income from the last enrollment period. As of a month ago, 363,000 Obamacare customers still had discrepancies and could see their costs go up.
Even if customers’ info matches what the feds have, the nature of Obamacare’s subsidy system still might cause them grief in 2015. Premium subsidies are tied not only to a customer’s income, but are calculated based on the second-lowest silver plan premium available on an Obamacare exchange.
Even if a customer looks at their insurance plan and decides the new 2015 premium is reasonable, if the benchmark premium has dropped, the amount of subsidy they’re eligible for will fall and they’ll be stuck with a bigger bill than expected, according to AAF. That’s why experts have been warning for months that customers need to take another hard look at their options this enrollment period, or face the consequences.
That’s a big problem when it comes to the Obama administration’s auto-enrollment plans. If a customer doesn’t change their plan, HealthCare.gov will simply sign them up for the same one, again potentially causing an unexpected premium hike.
But all that assumes that nothing’s changed in a customer’s life over the past year. AAF has a long list of life changes that can put a customer at risk for changing premiums and subsidy amounts. If a family member gets a new job or a customer gets married — or if there’s a new family member altogether — customers could see the amount they’re billed for coverage change.
“If a family is receiving subsidized coverage through the exchange, and a teenage child gets a job, the household income increases, placing the family at risk of an increased premium,” according to the report. “It may be better for a family to discourage their teenager from getting an after school job if it would mean a big increase in health insurance premiums.”
Moving could cause big problems as well. Obamacare required states to create ‘rating areas’ within the state according to the cost of health-care in a certain region, according to AAF. Even a small, in-state move could result in a big difference: AAF found that a 50-year-old woman who moves across certain county lines in Virginia could have her premium hiked by $41.50 a month, if she keeps the same insurance plan.
There are ways for Obamacare enrollees to avoid the glitches, of course. Model sign-ups who do extensive homework on HealthCare.gov over again this enrollment period can avoid many premium-boosting problems. And the administration could figure out a way to more accurately sort and verify customer applications.
But AAF’s research shows that in many ways, the Obamacare system makes it difficult for customers to control costs. Even on top of the rising cost of health insurance, Obamacare’s subsidy system continues to be less than user-friendly.