States Face Harsh Reality of Obamacare in 2017

Published November 3, 2016

On November 1, open enrollment for the insurance exchanges created by the Affordable Care Act (ACA) began, and much of the nation found themselves facing dramatic health insurance price increases for many consumer plans in the ACA exchanges. In a recent Washington Post article, reporter Jonnelle Marte argues, “Monthly insurance premiums for popular plans on are rising by 25 percent on average next year, according to government data. But the increases will be more dramatic in certain parts of the country, especially for consumers not receiving subsidies, the numbers show.”

According to a report from U.S. Department of Health & Human Services (HHS), the average 27-year-old buying the second-lowest-priced Obamacare “Silver Plan” in Alabama, Arizona, Illinois, Kansas, Minnesota, Montana, Nebraska, North Carolina, Oklahoma, Pennsylvania, and Tennessee is experiencing a 40 percent or more increase in monthly premiums compared to last year’s prices. The Silver tier is the second-most affordable plan in the exchange. According to HHS, it is “used to determine the size of the federal subsidy consumers can receive to lower their monthly premium costs.”

Health insurance consumers in the individual market can expect to see fewer choices and higher premiums in 2017. Edmund Haislmaier, an expert in health care policy and markets at The Heritage Foundation, recently wrote in The Daily Signal that “more than three-fifths of the states (33 in total) will have fewer insurers offering coverage on the Obamacare exchanges than they did in 2016. Arizona and Texas are each losing six insurers, while two other states, Kentucky and Ohio, are losing four each. Only one state, Virginia, will have more exchange insurers next year than this year.” Haislmaier also reports, “Five states—Alabama, Alaska, Oklahoma, South Carolina, and Wyoming—will have only one insurer offering exchange coverage in 2017, while another 13 states will have only two.”

Another problem facing many Americans is the rising cost of penalties those without insurance will have to pay when they file their 2016 tax returns. According to a recent USA Today article by University of Southern California Fellow Frank Gluck, 2017 tax penalties will be at their maximum for those who weren’t insured in 2016. Gluck mentions that the uninsured “will have the highest penalties at tax time in April: $695 per adult or a maximum of $2,085 per family or 2.5% of adjusted gross income, whatever’s higher.”

More than 20 million people declined to buy ACA-compliant health insurance plans in 2014 and most have legitimate reasons for rejecting Obamacare. Michael Hamilton, Heartland Institute research fellow and the managing editor of Health Care News, argued in a recent Consumer Power Report that if HHS wants more people to obtain access to high-quality health care and coverage, “ACA proponents should be calling for expanded exemptions from fines instead of jockeying for harsher fines against people who decide Obamacare insurance and subsidies offer poor value.”

What We’re Working On

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