There are many Obamacare-related statistics in the press, especially in reference to monthly premium increases for 2015. Various studies and analyses suggest relatively gently rate hikes for 2015. This news may come as a relief to many concerned about the cost of healthcare in the year to come, but it is important to understand your actual rate increases may not be as low as the averages being touted. That is because the reported averages are across plans, not the people enrolled in them.
Take this example provided by Jeff Smedsrud, CEO of HealthCare.com:
Minnesota has four returning carriers. Their rates from 2014 to 2015 changed as follows:
- A had a 17 percent rate increase.
- B had an 8 percent rate increase.
- C had a 2 percent rate increase.
- D had a 9 percent rate decrease.
Add them together and divide by four, and you see an average annual increase of 4.5 percent.
Now, let’s look at their share of enrollees:
- A had 24 percent of all customers
- B and C combined had about 12 percent
- D had less than one percent
Based on how many people were covered by each carrier, the average increase is now 13 percent.
Minnesota had a fifth carrier in 2014, which covered around 60 percent of people. However, that carrier exited the exchange for 2015. Their prices were 20 percent lower than others in 2014. Consequently, those insured by the exiting carrier who want to keep an exchange-based plan and continue receiving a subsidy will have to switch to another carrier’s plan and will see an average increase of about 30 percent.
Those insured by the exiting carrier can keep their 2014 plan but will not get a subsidy since their plans will now be offered in the private marketplace. Their rates, on average, will be 63 percent higher.
Essentially, there is no average. Rates will fluctuate from metal plan to metal plan and region to region. Whether you buy private health insurance coverage on and away from the state-based and federally facilitated exchanges, you will need to do the following:
- Look at your 2015 plan rate. Did it change?
- Consider your budget and healthcare needs for 2015. Did they change?
- Comparison shop. See what else is available on and away from the exchange. Look at plan details and out-of-pocket expenses. Check networks and drug formularies, too. If you intend to stay with your same plan for 2015, make sure your preferred providers, hospitals and prescription medications are still
- Calculate your premium tax credit using HealthCare.com’s subsidy calculator.
- Decide which strikes the best balance between benefits and affordability and enroll. Remember: Only exchange-based plans qualify for subsidies.
Americans who live in states with automatic plan renewal, which includes all states with federally facilitated exchanges and some with state-based exchanges, will receive notices regarding automatic plan renewal and plan changes. Be aware that if you are set up for automatic renewal and your current health insurance plan will not be offered in 2015, you will be switched to a similar plan, which could cost you more money. You can change plans by simply enrolling in a different one.
“They say, ‘figures don’t lie, but liars figure.’” Smedsrud said. “Key thing: Shop around. Do your own research.”
You may be able to start now. Some state-based exchanges have released their approved 2015 plan rates; however, rates for federally facilitated exchanges will not be announced until Nov. 11. Consumers can shop for 2015 health insurance plans when open enrollment begins Nov. 15, 2014. Those who need coverage with a Jan. 1, 2015, effective date must enroll by Dec. 15, 2014.
Consumers who wish to shop on or away from the Obamacare exchanges can visit HealthCare.com to find plans in their area and calculate their premium tax credit subsidy.
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