Affordable Care Act Insurance Rates Increase Average of 25 Percent

By Briana Vannozzi

Sticker shock is how Greg Toombs describes opening this year’s policy renewal for his Horizon Blue Cross Blue Shield Omnia Health Plan.

“A 28.6 percent increase announced that will take effect Jan. 1,” he said.

His premium is scheduled to increase from just over $2,000 a month for himself and his wife to more than $2,600. That’s nearly $32,000 a year.

“That’s money that we can’t save and money that we can’t spend on things like a new car. I have an 11-year-old car for example and it looks like I’ll be driving it another year or two instead,” he said.

They make too much to qualify for subsidies through the Affordable Care Act, but as realtors they have no employer-based health care option.

“New Jersey is seeing about a 7 percent increase in what’s called the benchmark plan. That’s the second lowest price, sort of mid range plan,” said Rutgers University Director of the Center for State Health Policy Joel Cantor.

Across the country policy holders will see an average increase of about 25 percent through the federal marketplace. Though as Cantor explains, New Jersey is actually faring better, ranked 21st in the nation.

“It’s going up for a few reasons. The federal government knew that sick people would enroll early and they were subsidizing, in effect subsidizing this market. That subsidy goes away in 2017,” Cantor said.

Cantor says insurance companies had to anticipate the risk pool — how many sick people versus healthy would sign up. And some underestimated premiums.

“In the marketplace there are about 250,000 individuals who receive insurance and about 80 percent of them get subsidies. There are also 100,000 who receive private insurance outside of marketplace who don’t get a subsidy and then we have almost a half a million New Jerseyans who are eligible for Medicaid and there’s no cost sharing for them at all,” said New Jersey Policy Perspective Senior Policy Analyst Ray Castro.

Though the federal government has adamantly pointed out that subsidies will also increase dollar for dollar. For example, a 27-year-old living in Newark with an income of $25,000 a year who paid $143 a month in premiums for a silver plan in 2016 will pay $142 per month due to increased tax credits.

Health and Human Services Secretary Sylvia Burwell said, “Thanks to financial assistance, most current marketplace consumers in New Jersey will be able to find plans with premiums between $50 and $100 per month.”

“We were told that we would save $2,500 a year on average per person and I get not everyone is going to experience that, but to say that this was part of the plan is pretty convenient on their part,” Toombs said.

While most New Jerseyans will qualify for a subsidy, more than half of the health insurance providers here have backed out of the marketplace, leaving AmeriHealth and Horizon Blue Cross Blue Shield. Consumers will still have about 19 plans to choose from and health experts anticipate any future price increases to stabilize.