» Oba­macare costs:

In­creases only af­fect in­di­vid­ual mar­ket

Milwaukee Journal Sentinel - - FRONT PAGE - GUY BOUL­TON

The cost of some Oba­macare plans is set to soar next year but the ef­fect on con­sumers could be lim­ited.

Con­sumers will be stunned by the rate in­creases for some health plans sold di­rectly to in­di­vid­u­als and fam­i­lies next year through ex­changes set up for the Af­ford­able Care Act, with pre­mi­ums ris­ing by more than 50% in many Wis­con­sin coun­ties, based on es­ti­mates re­leased Thurs­day by the state in­sur­ance reg­u­la­tor.

How­ever, once the ini­tial shock passes, con­sumers who buy health plans on the ex­changes will need to re­mem­ber two things:

For peo­ple who re­ceive fed­eral sub­si­dies, the cost of the health plans is capped to a per­cent­age of their in­come, rang­ing from 2.04% to 9.69%. They will be largely un­af­fected by the price in­creases.

The in­creases will be far smaller — an es­ti­mated 21% statewide — for health plans sold in the so-called bronze tier, which ef­fec­tively will be the only op­tion for peo­ple in Wis­con­sin who buy in­sur­ance on their own and are not el­i­gi­ble for fed­eral sub­si­dies.

The Of­fice of the Com­mis­sioner of In­sur­ance es­ti­mates that pre­mi­ums will in­crease an av­er­age of 36% statewide. But that’s an av­er­age of av­er­ages, and the ac­tual in­creases will vary through­out the state and by health plan. The ac­tual rates will be­come pub­lic on Nov. 1 when the mar­ket­places open.

The Of­fice of the Com­mis­sioner of In­sur­ance re­leased the es­ti­mates Thurs­day to pre­pare peo­ple for the po­ten­tial shock.

The price in­creases will af­fect only the mar­ket for in­sur­ance sold di­rectly to in­di­vid­u­als and fam­i­lies, as op­posed to those get­ting ben­e­fits through their em­ployer.

The peo­ple most af­fected are the es­ti­mated 20,000 to

30,000 peo­ple in the in­di­vid­ual mar­ket who don’t re­ceive fed­eral sub­si­dies and who aren’t in so­called tran­si­tional plans sold be­fore 2014.

“They are go­ing to be the ones who are hit the hard­est,” J.P. Wieske, deputy in­sur­ance com­mis­sioner, said in a tele­con­fer­ence.

The steep­est in­creases will be in health plans sold in the so-called sil­ver tier. Here’s why:

The Trump ad­min­is­tra­tion and Con­gress have not taken steps to fund the ad­di­tional sub­si­dies that go to peo­ple with lower in­comes who buy in­sur­ance through the mar­ket­places. The sub­si­dies help off­set de­ductibles and other out-of­pocket ex­penses.

In­sur­ers are re­quired to pro­vide the ad­di­tional cov­er­age but may no longer be re­im­bursed by the fed­eral govern­ment for the costs.

The only way to off­set the costs is to raise pre­mi­ums. But the Of­fice of the Com­mis­sioner of In­sur­ance and reg­u­la­tors in other states are al­low­ing health in­sur­ers to al­lo­cate the costs to health plans sold in the sil­ver tier. Pre­mi­ums for health plans in the bronze and gold tiers will in­crease less.

Most of the peo­ple who buy plans in the sil­ver tier — about 91% this year in Wis­con­sin — are el­i­gi­ble for sub­si­dies that, again, cap the cost to them.

In­di­vid­u­als and fam­i­lies with in­comes be­low 400% of the fed­eral poverty thresh­old — $48,240 for an in­di­vid­ual and $98,400 for a fam­ily of four — are el­i­gi­ble for sub­si­dies.

Most peo­ple who aren’t el­i­gi­ble for sub­si­dies now buy health plans in the bronze tier.

The un­cer­tainty caused by the tur­moil in the mar­ket also has con­trib­uted to the rate in­creases.

Molina Health­care, which had the largest mar­ket share among in­sur­ers who sell health plans on the mar­ket­places, and An­them Blue Cross and Blue Shield in Wis­con­sin will not sell health plans on the mar­ket­places next year.

As a re­sult, roughly 75,000 peo­ple will have to shop for new health plans.

“The in­creases we are see­ing re­flect the in­creased amount of risk that a smaller num­ber of car­ri­ers are go­ing to have to take on,” Wieske said.

It also raises ques­tions whether the mar­ket is sus­tain­able.

“No­body wants to com­pete for this mar­ket, de­spite the sub­si­dies that are avail­able to con­sumers,” Wieske said. “That is sort of trou­bling.”

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