Some rates rise 25% as Healthcare.gov opens

Consumers can browse about 30 plans on federal exchange

Federal regulators opened the federal exchange Healthcare.gov for consumers to browse for plans on Monday, as they announced that rates will rise 25% for the plans for which the tax subsidies are calculated.

The Department of Health and Human Services also warned that more than one in five consumers using the site will have only one insurer from which to choose.

As concerns grow about much higher rates in many states, officials emphasized that the vast majority of people shopping on Healthcare.gov will pay less than $100 a month for premiums when tax credits are included. More than 70% of people will pay less than $75 a month after tax credits.

Healthcare.gov handles individual insurance sales for those who live in the 38 states that don’t have their own exchanges.

The second lowest cost silver plan on the exchanges is the benchmark plan on which regulators base tax credits. That’s the rate that is up 25%, which also is the expected increase in 2017.

“This is a big increase in an environment where health care cost growth is generally modest and incomes aren’t growing much at all,” says Larry Levitt, senior vice president at the Kaiser Family Foundation. “The increase is largely a reflection of insurers catching up to the fact that the number of sick people signing up for insurance is bigger than expected.”

On average, consumers will have 30 plans from which to choose and the average insurer has 10 plans for sale. HHS officials on Monday reminded that most people with employer-provided insurance have far fewer choices than those shopping on the federal exchange.

HHS said this month that about 2.5 million people eligible for tax credits to lower the cost of their premiums are missing out, because they are buying their insurance through insurers or brokers. The Kaiser Family Foundation announced last week that about 5 million people who are uninsured could receive financial assistance.

Even those who weren’t eligible for tax credits in the past should apply again, because they may qualify now that many rates are much higher, said HHS spokesman Kevin Griffis.

“The increase (reflects) insurers (realizing) the number of sick people signing up is bigger than expected.” Larry Levitt, senior vice president, the Kaiser Family Foundation