Companies Warn Obamacare Plan Losses Leave Them Poised For 2017 Rate Hikes
Insurers, consumers, and small businesses alike have been feeling the pinch under Obamacare. Now, insurers are warning that those purchasing their Obamacare plans on health exchanges in 2017 will likely face significant rate hikes. The AP reports that many health insurers say Obamacare plans are continuing to force them to accrue major losses. In Virginia, for instance, nine insurers that will sell HealthCare.gov insurance plans in 2017 want average premium increases ranging from 9.4% to 37.1%, according to initial estimates filed with the state. The AP points out that for 2016, premiums for Obamacare’s silver plan increased on average by just over 7%, according to Department of Health and Human Services data. The AP suggests that the Obamacare plan has so far seen “nagging problems” that “seem to center on lower-than-hoped-for enrollment, sicker-than-expected customers, and a balky internal stabilization system that didn’t deliver as advertised and was already scheduled to be pared back next year.” Kaiser Family Foundation’s Larry Levitt cautioned that Obamacare is “likely in for a significant market correction over the next year or two,” as “there have been a lot of signals from insurers that premiums are headed up.” In the case of one of the insurers planning to participate in the market in 2017, the Wall Street Journal reports Anthem said it broke even on the plans it offers through Obamacare exchanges, which means it fared much better than competitors such as UnitedHealth. However, the company isn’t expecting to reach its target profit margin for Obamacare of 3% to 5% until 2018, CEO Joseph Swedish warned.
What This Means For Small Businesses
Small businesses suffer the brunt of rising labor costs, including healthcare expenses. News that insurers expect to heavily increase premium costs in 2017 is troubling given the mounting financial burden small businesses already face.
Additional Reading
Bloomberg News also reports on Anthem’s projections for Obamacare through 2018.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
