HHS used the hypothetical rate hike to illustrate the impact of premium tax credits, which were not included in the state forecast, on premiums.
The federal tax credits, available to more than 85 percent of Ohio marketplace consumers, meant the average marketplace premium increased just $4 a month last year for Ohio consumers with tax credits, according to HHS.
And most Ohio consumers shopping the exchange at HealthCare.gov will not pay significantly more next year, despite headlines again projecting double-digit rate increases, according to Kathryn Martin, HHS’ acting assistant Secretary for planning and evaluation.
“Headline rate increases do not reflect what consumers actually pay,” Martin said. “Our study shows that, even in a scenario where all plans saw double-digit rate increases, the vast majority of consumers would continue to have affordable options.”
In addition to the tax credits, the competition among the 11 health insurers approved to offer plans in the marketplace next year will hold prices down, HHS officials said during a Wednesday conference call.
Still, high-profile defections, including plans by United Healthcare and Aetna to withdraw from marketplaces in Ohio and other states next year, have narrowed consumers’ choices.
This year, 17 companies offered plans in Ohio’s marketplace, and residents each of the state’s 88 counties could choose from plans offered by at least four companies listed on the insurance exchange, according to the state insurance department. In 2017, residents in 19 Ohio counties will have only one company listed as an option to buy health insurance, and 28 counties will have only two companies from which residents can choose.
“Less choice and higher prices are not good for consumers or their families,” Ohio Lt. Governor Mary Taylor, a longtime critic of President Barack Obama’s signature health reform law, said in statement. “Premiums are skyrocketing in Ohio and across the country because Washington bureaucrats are over-regulating the market and forcing consumers to buy coverage they do not want and cannot afford.”
The pullout of several large national insurers who reported losses in the insurance exchanges has raised questions about the long-term viability of the marketplaces in Ohio and elsewhere. But prices should remain affordable, regardless of how many insurers enter or exit the marketplaces nationwide, because of the way the tax credits are designed to work, Martin said.
The tax credits protect consumers from rate increases and keep coverage affordable by increasing when the cost of the benchmark plan increases, so if all premiums in the marketplace go up by a similar amount, the majority of consumers will not pay significantly higher rates for coverage, she explained.
About the Author