The fight is on to control the narrative after big insurers, including Aetna, jumped ship in the Affordable Care Act marketplace, and Florida regulators approved an average premium increase of 19.1 percent for 2017 — double last year’s jump.
Obamacare opponents are seizing the developments as evidence government-created marketplaces are breaking down, while administration officials say read past the headlines: most consumers will continue to get affordable coverage after government help in the form of tax credits.
Consumers have to look beyond announced rate increases to figure out what folks actually pay, said Jonathan Gold, press secretary at the U.S. Department of Health and Human Services.
“Consumers in Florida will continue to have affordable Health Insurance Marketplace options next year,” Gold said in a statement. “Among Marketplace consumers, most will be able to select a plan for less than $75 per month.”
Tax credits drop the cost of coverage below the sticker price and shopping helps consumers find the best deal, he said.
Before Florida regulators announced approved rates Friday, U.S. officials calculated that even if 2017 health insurance rates went up 25 percent, 86 percent of Florida consumers buying plans from healthcare.gov would see premiums remain below $100 per month after tax credits, U.S. officials said. About 82 percent would pay $75 or less, they said.
“Headline rate increases do not reflect what consumers actually pay,” said Kathryn Martin, acting assistant secretary for planning and evaluation.
But FreedomWorks, a Washington, D.C. group critical of the health law, says the administration’s storyline throws a smokescreen over the true costs taxpayers pick up. It also downplays risks to the whole enterprise from the exit of big insurers like Aetna and UnitedHealthcare from public exchanges, the group maintains.
“The Department of Health and Human Services is desperate to change the narrative about Obamacare,” said Jason Pye, director of communications for FreedomWorks. “Try as they may to distract Americans from the failures of ObamaCare as insurers exit the exchanges, the law is leading the individual markets and some states into a slow and painful death spiral that will drive up premiums and leave taxpayers with the tab.”
In Florida, regulators said on Friday they granted seven health insurers on the government exchange premium hikes for individual plans ranging from 15.4 percent for Florida Health Plan Inc. to 36.8 percent for Humana Medical Plan Inc.
Blue Cross and Blue Shield of Florida Inc., or Florida Blue, received a 19 percent increase.
Among 14 insurers offering plans on and off the exchanges, not all premiums are going up. Cigna Health and Life Insurance Co. will see a 1.5 percent reduction and Sunshine State Health Plan is unchanged. The average overall effect after “weighting” to reflect each insurer’s market share, officials said, is a 19.1 percent increase.
In Palm Beach County, an individual making $27,000 a year and choosing a “silver” plan would pay an average of $211 a month in 2017 after tax credits, according to figures provided by the state’s Office of Insurance Regulation.
Aetna said last month it was pulling out because losses were too high. Aetna officials had previously expressed confidence in the public exchanges, but a letter from an Aetna executive warned of a possible marketplace retreat if regulators did not approve a proposed merger with Humana.
The U.S. Department of Justice has opposed the merger on the grounds it could hurt consumers by reducing competition.
To be clear, not every major insurer is bailing out. One of the state’s largest, Florida Blue reported a $471 million gross profit on ACA-compliant individual plans in 2015, up from $124 million in 2014. A spokesman said the company “remains committed to the Affordable Care Act and the Florida marketplace.”
Consumers in Florida who receive subsidies through the exchange have paid an average of about $84 per month, U.S. officials said prior to 2017 rate approvals. About 9 out of 10 signing up through healthcare.gov in Florida get subsidies, officials said.
“But the reality of the law is that the subsidies aren’t free money,” Pye said. “Taxpayers are picking up an average of $302 per plan each month. The Congressional Budget Office projects that the federal government — that is, taxpayers — will spend more than $600 billion on these subsidies over the next ten years.”
Federal officials said independent researchers calculated that 2016 marketplace rates are between 12 percent and 20 percent below what the Congressional Budget Office initially predicted. Meanwhile, more people than ever, including more than 1.5 million signing up through healthcare.gov in Florida, are getting coverage. Don’t forget, they say, what the landscape was like before the law: For example, people are no longer being denied coverage for having pre-existing conditions.
The administration’s analysis placed little attention on deductibles, though these can pose a considerable cost to consumers in many of today’s marketplace as well as employer plans.
Last month, federal officials released another report saying expanding Medicaid reduces marketplace premiums about 7 percent in states that choose to do it. Florida, which led opposition to the health law in court, has declined to expand Medicaid to cover more low-income people.
Administration officials also say look at the bigger picture: Since the Affordable Care Act became law, overall health care prices have climbed “at the lowest rate in 50 years.” They also say premiums at employer-sponsored health plans have grown “at some of the slowest rates on record,” citing research from the Kaiser Family Foundation and partners.
Groups fighting Obamacare see it differently. Americans for Prosperity president Tim Phillips called rate hikes a “grim reminder that Obamacare is still hurting Americans. This is a problem at the household budget level that just keeps getting worse and worse with each passing year.”
Florida 2017 health premiums
Company /Approved change in premiuims
On and Off Exchange
1. Blue Cross and Blue Shield of Florida, Inc. 19.0%
2. Celtic Insurance Co, 20.0%
3. Florida Health Care Plan Inc. 15.4%
4. Health First Commercial Plans Inc. 11.7%
5. Health Options Inc. 18.9%
6. Humana Medical Plan Inc. 36.8%
7. Molina Healthcare of Florida Inc. 17.4%
8. Harken Health Insurance Co. Withdrawn
Off Exchange Only
9. Aetna Health Inc. 22.0%
10. Aetna Life Insurance Co. 25.0%
11. AvMed Inc. 27.3%
12. Cigna Health and Life Insurance Co. -1.5%
13. Coventry Health Care of Florida Inc. 11.8%
14. Freedom Life Insurance Co. of America 17.4%
15. Sunshine State Health Plan 0.0%
Source: Florida Office of Insurance Regulation