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Obamacare Rates To Increase By Average of 45 Percent In 2018

Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.
The Florida Channel
Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.

Health insurance rates on the Obamacare marketplace in Florida will increase by an average of 45 percent in 2018.

But as in past years, most consumers will not see an out-of-pocket increase because federal subsidies will offset the cost.

Some individuals and families could actually see their out-of-pocket costs decrease slightly, according to information from the Florida Office of Insurance Regulation.

Florida's Office of Insurance Regulation released the figures Tuesday for the six health insurers who will sell "Obamacare" plans on the federal marketplace.

The rates are increasing by larger margins this year because the insurers are no longer counting on special subsidies from the federal government. Those subsidies, called cost sharing reductions, help low-income consumers pay for deductibles, co-pays and other out-of-pocket costs.

When Florida Blue filed its rates with the state in June, company officials warned that the rates could increase another 20 percent if the cost sharing reductions went away.

Florida Blue spokeswoman Christie DeNave says her company is now assuming the government will stop funding those reductions.

“We haven't received any assurances that they will be there, so the best way for us to handle that, we felt, was to price our plans as though they will not be there,” DeNave said.

Insurance companies in Florida in 2016 received $1.3 billion in cost sharing reduction payments from the federal government.

“If those go away, that’s a huge hit to the insurers in this state,” DeNave said. 

If the federal government decides to fund the cost sharing reductions in 2018, Florida Blue will not accept those payments, DeNave said. It can not readjust rates in the middle of the year, she said. 

Since the subsidies will keep premiums low for people who do not make a lot of money, the government will end up paying for a bulk of the increases.

The Congressional Budget Office released an analysis in August that found that ending the cost sharing reductions would increase the deficit by $194 billion over 10 years.

The plans that will see the biggest increases are the Marketplace’s Silver plans.

Consumers who do not qualify for any subsidies will see those increases passed along to them. But DeNave says they will have an option to buy similar plans that cost less money off the Marketplace.

Florida Blue estimates that 7 percent of its roughly 1 million Marketplace consumers will see significant premium increases in 2018, said Dave Pizzo Florida Blue market president for the Tampa Bay area.

Roughly 16,000 of those consumers live in the Tampa Bay area.

Florida Blue is offering plans in all 67 counties and is the sole provider in several mostly rural counties, largely in the Panhandle and along the Florida-Georgia border.

In highly populated counties like Miami-Dade, Broward and Orange, residents will have several plans to choose from.

All six insurers requested large double-digit rate hikes. The state has the power to negotiate those rates down to a lower price. The lowest increase went to Florida Health Care Plan Inc. with 26.5 percent and the highest — 71 percent — went to Molina Healthcare of Florida, Inc., according to data from state insurance officials.

Rates can be tricky to understand without context. Last year, for example, the average monthly premium with Florida Blue was $525. This year it jumps to $725. But those figures don't include subsidies given by the federal government to help consumers pay for their plans.

"Most consumers with the silver plans will not see an out-of-pocket change, as the federal premium subsidy will also increase to absorb this extra cost," state insurance officials said in a press release.

According to their data, a family of four earning $53,000, as well as an individual earning $27,000, may see a slight decrease in their out-of-pocket health insurance premium in 2018.

The Sunshine State has led the country in enrollment on the Affordable Care Act exchange with more than 1.4 million consumers. About 75 percent of those consumers received funds to help pay for their insurance, according to the federal government.

Some experts say President Donald Trump’s administration is responsible for a large share of the rate hikes.

This November marks the first time that enrollment in President Barack Obama's signature law will begin under Trump, who campaigned on abolishing the law and has repeatedly said it's in a death spiral. He and congressional Republicans have been unable to deliver on their promise to "repeal and replace" the 2010 health care law.

But Trump recently cut funding for navigators who counsel people about various plans and help them enroll, slashing the navigator budget 40 percent from $62.5 million for 2017, to $36.8 million for next year. Trump is also reducing the funds that pay for advertising during open enrollment. Advertising will be cut from $100 million spent on 2017 sign-ups to $10 million, said Health and Human Services officials.

Because of these cuts in advertising and enrollment assistance, those who end up signing up for coverage are more likely to be people who desperately need the insurance, said John Holahan, an economist with the Urban Institute.

"This will drive up the risk pool, so premiums will go up," Holahan said.

Meanwhile, under the administration of Republican Gov. Rick Scott, Florida insurance officials are reminding consumers who don't qualify for funding assistance that they can purchase insurance outside the federal exchange. But those premiums also increased in the market by an average of 18 percent.

In 2013, an unsubsidized plan comparable to an existing silver plan would cost a family of four an average of $7,200, according to the state. In 2018, the average unsubsidized cost for the same family totals $17,000.

The Associated Press contributed to this story. 

Julio Ochoa is editor of Health News Florida.