Obamacare premiums set for another double-digit jump
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The cost of Obamacare coverage is due to rise by a median of 14% next year, according to a new analysis, marking further turmoil for the law's marketplaces.
Why it matters: It would mark the second straight year of double-digit premium increases in the individual market.
- Customers could be on the hook for thousands of more dollars in costs, worsening the health affordability crisis.
The big picture: Insurers blame the hikes on rising costs of health care services and the expiration of enhanced Affordable Care Act subsidies, per the KFF analysis of 77 health plans' preliminary rate filings in 16 states and the District of Columbia.
- Some enrollees will get subsidies that would cushion the blow, but those who make more than 400% of the federal poverty level, or about $64,000 for a single person, won't qualify.
- Higher premiums also drive up the government's cost of subsidizing coverage for poorer individuals in the marketplace.
Zoom in: The higher out-of-pocket costs are motivating some healthier enrollees, who are more price sensitive, to drop their coverage.
- That, in turn, makes the overall pool of enrollees sicker and more expensive to care for, causing an increase in overall premiums.
- Insurers estimate that the sicker risk pool drove premiums up by roughly four percentage points this year and expect a similar increase in 2027.
- While costs rise, the market is shrinking: Affordable Care Act enrollment already is down by about 3 million people year over year, to 19.2 million, according to federal data released last month.
What they're saying: "When you see a decline in enrollment coupled with such a big spike in premiums, neither of those are exactly comforting signs," said Emma Wager, a senior policy analyst for KFF's Program on the ACA.
- Still, she added, "for now the market is holding strong" overall. The total of 19 million enrollees is still more than any year before 2024.
Democrats are seizing on the enrollee drop-off as a campaign issue and blaming Republicans for the subsidy expiration and making health care more unaffordable.
- "A mind-boggling number of Americans have found themselves joining the ranks of the uninsured," Brad Woodhouse, president of the Democratic-aligned group Protect Our Care, said last week, citing "GOP-driven health care cost hikes."
The other side: The Trump administration blames the enrollment drop-off on improper and fraudulent enrollments that it's cracking down on.
- "The Trump administration has utilized numerous tools mobilizing a full-scale effort to ensure federal subsidies are going only to those for whom they are intended," an HHS report last month stated.
Between the lines: Although the subsidy expiration is getting much of the attention, rising costs of care also are a major factor.
- Coverage of GLP-1 weight loss medications and other specialty drugs along with higher hospital costs are some of the drivers, KFF states.
- "The underlying cost of medical care and prescription drugs has risen by 10% for 2027 — greater than the 8% average growth seen over the last few years," the analysis notes.
What we're watching: Whether the turmoil spurs Congress to try to revive the enhanced subsidies, assuming Democrats flip control.
