If you are currently have an income that’s over 400% of the federal poverty level, expect big changes in your health insurance in 2016. While low net premiums have made coverage more affordable for those who receive government subsidies, those who pay full price for their coverage are facing higher premiums than ever. Premiums have already nearly doubled since Obamacare went into effect, and are going to continue to grow under the current law. Recent announcements from some of the major carriers are indicating premium hikes may be as high as 30% or more in some areas.
What’s Happening With Premium Hikes?
Because health insurance is now a guaranteed-issue product, it is especially attractive to those who know they are going to be facing large medical bills. So the sick people have been signing up, causing health expenses to rise for the carriers, and the subsequent rate increases that are being announced.
The government has also been subsidizing the insurance carriers, so many have been offering plans at a loss, in order to gain market share. Those subsidies end after next year, so future rate increases are likely to be even higher.
What Do These Hikes Mean For You?
So what can you do now? If you are paying full-price for your health insurance, it is probably already costing more than it ever has, and next year you might have to pay even more. Premium hikes won’t happen for all carriers, but if you stay with your current plan it’s very likely 2016 will see your premiums continue to go up.
Unfortunately, this is the inevitable result of the way our healthcare system is now structured. A lack of price transparency and market competition enables healthcare providers to overcharge for their services and medications. And a system in which the costs of paying these huge costs is laid on small business owners, self-employed people, and others who pay for their own health insurance is a system that will continue to grow more unaffordable.
Remember that you do not likely qualify for subsidies unless you earn less than $47,080 as an individual, or less than $97,000 as a family of four.
What Can You Do To Save Money and Get Good Coverage?
What happens next? Fortunately, every year you can reshop your coverage, and switch to the best-priced plan that meets your needs. You should start hearing about how your rates will change by early October. Open enrollment for 2016 coverage goes from November 1, 2015 until January 31, 2016.
This gives you enough time to find a plan with a lower premium with another carrier, but offers similar coverage .Your insurance agent should offer to do the research on this for you every year.
The health insurance world is complex and even scary right now, but by seeking guidance and looking through your options, you should be able to find some ways to at least slow down the rate increases that are coming.
Wiley Long is President of HSA for America, and a passionate advocate for consumer-based solutions that will improve price transparency and lower health insurance and medical costs for people purchasing individual and family health insurance plans.