Health Insurance Premiums to Rise Significantly in 2017

Date: October 31, 2016

Average increase of 16.6% for individual plans in NY

NFIB members have reported “The Cost of Healthcare” as the
#1 problem for small businesses in Small
Business Problems & Priorities
since 1986. That problem unfortunately
will continue to grow next year, given the recent news from the
Obama Administration. The US Department of Health and Human Services announced last
week that healthcare insurance premiums will rise substantially in 2017. The average
2017 Obamacare premium increase for all states will be 22 percent for the most
popular plan, while the average premium increase in the 39 states offering
plans on the federal exchange will be 25 percent.

Despite the initial shock of the headline-grabbing “25
percent increase”, the reality is that almost 80 percent of people purchasing
plans on the federal exchange receive tax credits that will offset the premium
increases. And the government suggests that even more people will be eligible
for tax credits in 2017. While this sounds like good news for consumers, taxpayers will be left with an even greater burden as more
consumers receive subsidized premiums.

Why are premiums increasing so
dramatically?

Rising premiums are the result of a variety of factors including increased plan utilization and insurance companies paying more claims than expected and the high cost of prescription drugs among other reasons. 

While some insurance companies have mitigated losses by increasing premiums,
other companies have altogether discontinued money-losing plans and have opted
to leave certain markets. According to the Kaiser
Family Foundation
, the average number of insurers participating in the
federal exchange is 3.9 in 2017 compared to 5.7 in 2016.  

What does this news mean for my
small business?

As a small business owner in New York, you will not be impacted by the news
about premium increases on the federal marketplace. New York does not
participate in the federal exchange but rather operates the NY State of
Health
marketplace.

What is the average rate of premium
increase in New York State?

In August 2016, the Department
of Financial Services approved
average rate increases of 16.6 percent for
individual plans and 8.3 percent for small-group (51-100 employees) plans. This
is the largest insurance rate increase since Obamacare took effect. In 2017, 17
insurers will offer plans in the NY State of Health marketplace.

What else should you know?
   Open
Enrollment Period
The open enrollment period for insurance coverage begins on November 1,
and the last day to sign up for a plan for 2017 is January 31, 2017. Uninsured
consumers can sign up for a plan during open enrollment, and insured consumers
can switch to a plan that more closely fits their needs and resources. For more
information, visit NFIB’s guide
to open enrollment for 2017.  

    Penalty
The current penalty for not having health insurance is 2.5 percent of
household income or $695 per adult or $347.50 per child, or whichever is
greater. It will increase with the rate of inflation for 2017.

 

Related Content: NFIB in My State | Healthcare | New York

Subscribe For Free News And Tips

Enter your email to get FREE small business insights. Learn more

Get to know NFIB

NFIB is America's leading small business association, promoting and protecting the right of our members to own, operate, and grow their business

Find out more about
NFIB Membership

Or call us today

1-800-634-2669

News

State Issues


Choose Your State

Foundations

YEF Foundation Research Center Legal Foundation

Member Benefits