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.
