The cost of Obamacare coverage is set to rise sharply once more. A new KFF analysis of 77 health plans' preliminary rate filings across 16 states and the District of Columbia projects a median premium increase of 14% for next year. This would mark the second straight year of double-digit jumps in the individual marketplace.
Insurers are attributing the increases to two primary factors. They cite the rising cost of health care services as a key driver. Additionally, the expiration of enhanced Affordable Care Act subsidies is adding to the financial pressure on the marketplaces.
The impact will be unevenly felt among enrollees. Some will receive subsidies to offset the higher premiums, but those earning over 400% of the federal poverty level—approximately $64,000 for a single person—will not qualify for such assistance. This leaves a significant portion of customers facing thousands of dollars in added costs, exacerbating the ongoing health affordability crisis.
The higher premiums are already influencing behavior in the market. Some healthier, more price-sensitive enrollees are choosing to drop their coverage. This trend threatens to create a feedback loop, as a sicker and more expensive overall pool of enrollees could drive costs even higher in the future.
Ultimately, the increased premiums also raise the government's cost of subsidizing coverage for the poorest marketplace participants. The policy response remains uncertain, with the future of enhanced subsidies a point of ongoing debate.