Health insurance premiums for commercial coverage under the Affordable Care Act will rise sharply next year across most of the country, but the vast majority of consumers in Ohio will be shielded from the rate hikes by tax credit subsidies, according to federal health officials.
The Obama administration announced that premiums for the second-lowest cost “Silver” plans sold through federally facilitated health insurance marketplaces in Ohio and 38 other states will rise by an average of 25 percent, from $242 a month this year to $302 next year.
“With wages largely flat or even declining and the cost of living going up, millions of middle-class families in Ohio and across the country are already feeling squeezed,” said Ohio Sen. Rob Portman, who was among a number of Republican lawmakers pointing to the rate hike as evidence that the health care law is failing. “Today the Obama Administration confirms what too many Ohio families already know from experience: health care costs are going up, while health care choices are going down.”
But some states will see much bigger jumps in premiums under the health care law than others.
The average premium for the benchmark Silver plan in Ohio is expected to rise just 2 percent, from $222 a month this year to $226 in 2017. And that’s before accounting for premium tax credit subsidies available to most individuals with incomes from $11,880 to $47,520 a year, who qualify for coverage in the marketplaces because they don’t have access to employer-sponsored insurance and do not qualify for Medicaid or Medicare.
About 80 percent of marketplace consumers in Ohio qualify for the income-based subsidies, which increase if premiums increase so individuals and families don’t have to bear the full brunt of the price hikes passed on by insurance companies to cover the medical costs of their policyholders.
In Ohio, the average premium for the benchmark Silver plan after tax credits will be about $142 next year for a 27-year-old non-smoker earning about $25,000 a year — about the same as last year, according to figures from the U.S. Department of Health and Human Services (HHS).
In addition, more than half of all marketplace consumers in Ohio will be able to sign up for health plans with premiums under $75 a month, and 60 percent will be able to find plans with premiums below $100 a month when open enrollment begins next Tuesday, HHS officials said.
“Thanks to financial assistance, most current marketplace consumers in Ohio will be able to find plans with premiums between $50 and $100 per month,” said HHS Secretary Sylvia Burwell. “Many uninsured Ohioans could also qualify for financial assistance, as could 64,000 Ohioans currently paying full price for off-marketplace coverage.”
About a quarter-million Ohioans signed up for marketplace coverage, commonly referred to as Obamacare, last year. But an additional 64,000 state residents purchased individual health coverage outside the marketplace, forfeiting the tax credits, according to HHS data.
While off-marketplace plans must comply with the same minimum benefit requirements and non-discrimination rules as marketplace plans, the federal tax subsidies are only available in the marketplace.
According to a recent study from the Robert Wood Johnson Foundation, average premiums and deductibles for individual and small-group health plans purchased in the marketplace this year were nearly 13 percent cheaper than for plans sold outside the marketplace.
Ohio consumers can already visit HealthCare.gov to check out their options for 2017 coverage during open enrollment, which ends Jan. 31.