By Stephanie Edwards, Capstone Brokerage Benefits Account Manager, June 23, 2016

Increases to premium for individual health insurance may be on the horizon for 2017. Insurers everywhere are citing financial losses under Obamacare or ACA. The rates of these increases vary from state to state. In North Carolina, for example, Aetna is requesting 24.5% increase and Blue Cross by 18.8% while United Healthcare has decided to withdraw from the exchange market entirely. Many should not feel the hit of these increases due to the numerous tax credits available on the exchange. According to Avalere Health, which performed a study on the increase of insurance plans nationwide, the average monthly premium would increase by 12% or $503. It was also significant to note that the most popular, low cost insurance plans received the least amount of increase.

Why are rate increases coming?

The most common reasons for these rate increases include lower than expected enrollments and customers with more healthcare costs than expected. For carriers, the troublesome part is getting the larger number of healthy individuals to have coverage so the cost is spread over a wider population which would reduce the percentage of increase. Many carriers now offer a wellness program to incentives individuals to become more active and encourage them to live healthier lifestyles.

Any request a carrier makes to increase their rate must be approved by the state’s Department of Insurance. Once the rates are approved, they will most likely wait to be released until November 1st. If a carrier asks for a rate increase with no reasonable justification, it is highly likely that the Department of Insurance will not be allowed to raise their rates. It is certainly clear that ACA has completely changed how the healthcare industry operates. With the many tax credits available to those purchasing coverage on the exchange, it’s unlikely that these proposed increases will have a significant effect on the average person.

Will the increases ever stop?

Obamacare has truly changed the way insurance is priced and sold in America. The mandates that the Affordable Care Act created will take time to adjust in the insurance market. Many consumers are questioning the need for increases and rightfully so. However the coverage requirements set forth by the Affordable Care Act simply cost more money. The coverage provided by many carriers is different and some would consider better but with that there is a price. American’s can expect to see these increases over the next year and hopefully at some point they will level out. If you have any questions regarding your individual coverage or you company’s employee benefits packet reach out to your broker for an in depth analysis of your unique insurance needs.