2017 Affordable Care Act marketplace premiums rise 25% nationally, up 1% in Arkansas

As open enrollment kicked off this week for the Affordable Care Act, those looking to enroll have experienced sticker shock as 2017 premiums of popular plans sold on HealthCare.gov rose an average of 25% over the last year, according to a Nov. 1 report by the Kaiser Family Foundation.

While Arizona consumers saw a whopping 145% premium increase compared to a last year, Arkansas reported a mere 1% increase. Meanwhile Oklahoma had a 67% higher premium, while Missouri’s premiums rose 8%. Those premium increases were based on rates given to a 40-year-old non-smoker earning $30,000 annually, according to the Kaiser report.

The 40-year old male in Little Rock would see a “Silver tier” premium of $314 for 2017, up $4 from the 2016 premium and includes no tax credit. With the tax credit the same individual’s net cost will be $207 next year, $1 less than the $208 charged in 2016, according to the Kaiser data.

The report focused on changes in the second-lowest cost “Silver” plan, dubbed the most popular choice of those sold on the marketplace. Kaiser said this plan also serves as the benchmark used to determine the amount of financial assistance individuals receive in subsidies.

Part of the discrepancy in the premium relates to subsidies and tax credits that can vary widely from state to state. For instance the 40-year old’s tax credit in Arkansas rises 4% to $107 next year, offsetting the 1% uptick in premiums. But in neighboring Oklahoma the comparable monthly premium jumped from $295 last year to $493 in 2017. For this consumer it takes a tax credit increase of 230% to fully offset the premium increase. Conversely in cities like Boston where the monthly premium for this consumer declined 1% to $247 monthly in 2017, the tax credit available also shrunk to just $40, down 5% from 2016.

Healthcare officials have largely downplayed the rate increases saying more than 8 in 10 consumers will qualify for Affordable Care Act subsidies that help cushion the blow, also noting that the higher premiums go, the more Americans will be eligible for tax credits. However, tax credits are given at the end of the year, which is not helpful in covering the monthly cost increase for the 12 months before.

Kaiser also said premiums are going up in some areas of the country because providers are pulling out of the market which leaves customers with fewer options. Some insurance companies are raising rates because the premiums they charged initially were too low to cover the costs they faced, causing them to lose money, said Cynthia Cox, associate director of health reform and private insurance for the Kaiser Family Foundation.

Arkansas has four providers in the 2017 marketplace, one less than a year ago after United Healthcare pulled out. United Healthcare had only about 9% of the individual market share in Arkansas widely trailing Arkansas Blue Cross Blue Shield’s 78% share, according to HealthInsurance.org.

As of August 2016, there were 61,189 people with qualified health plans through the Arkansas exchange, in addition to 258,000 low-income residents who were enrolled in Arkansas’ private option Medicaid expansion plan, which uses Medicaid funds to purchase private plans through the exchange, according to state records.

Kaiser warned in the report that premium increases could be higher in rural areas, not featured in the report that focused on the largest metro in the state. Cox said consumers in smaller metros and more rural areas tend to have fewer options for coverage because it’s more expensive for insurers to offer plans with smaller populations and fewer health care providers. She said the best thing consumers can do is shop around and compare plans during the open enrollment period which ends Jan 31, 2017.

Roughly 13.8 million people around the country are expected to choose insurance plans through exchanges during this enrollment period, according to the Department of Health and Human Services.

Arkansas has a partnership exchange for individuals, and a state-run exchange for small businesses. Starting this month when open enrollment for 2017 began, the state said it will run its own exchange for individuals as well, but will continue to use Healthcare.gov’s enrollment platform.