Obama Administration Finally Admits Obamacare Premiums Are Rising
The Obama administration conceded that health insurance premiums on federal Obamacare exchange HealthCare.gov are rising in 2015 — but proposed that customers deal with the problem by again getting rid of their plans.
The Department of Health and Human Services issued a report Thursday concluding that average premiums will rise by five percent in the 35 states where the federal government runs the exchanges.
The Obama administration has continued to tout the line that Obamacare is lowering the cost of health insurance, but even after many individual market customers saw cost increase when Obamacare launched in 2014, HealthCare.gov customers are likely in for more hikes.
“Consumers have affordable choices for renewing their coverage and signing up the first time,” HHS secretary Sylvia Burwell said in a statement. “With additional, affordable quality plans available, returning customers may find an even better deal if they shop and save.”
But the fine print with Obamacare exchanges is that if you like your plan, you still shouldn’t keep it. The report found that the “benchmark” plan, the second-lowest cost silver plan which determines the amount of premium subsidies available to all Obamacare customers, rose by a smaller margin, just two percent on average. That will leave customers who choose any different plan with a larger share of their costs than last year, with a premium that’s growing faster than the subsidy.
Avalere Health, a top consulting firm, found earlier this year that if Obamacare customers do keep their plans, they’ll be in for much larger rate hikes. While insurers who have grabbed a customer base in the first year of the exchanges are driving up their rates, new insurers are entering the marketplaces to pick off new customers with a lower rate.
HHS is strongly encouraging customers to shop around and choose new plans for 2015, rather than keeping the coverage they purchased last year. The new normal for Obamacare customers appears to be that customers who are sensitive to health insurance costs won’t be able to keep their plan — and their doctors, hospital network, drug coverage and more — for more than a year.
After over a year of problems with the health-care law, customers are likely not surprised by new glitches at this point. But while selling the health-care law, Democrats and President Obama himself made multiple promises that haven’t come true. President Obama, before the bill was fully written, vowed that his health care reform would lower premiums by $2,500 a year for the average family — and that if they liked their health care plans, they could keep them.