Is Healthcare The Next Bubble? + Statistics & Facts Obamacare

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The cost of healthcare, like higher education, has continued to escalate year after year, outpacing wage growth and overall inflation rate.

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The cost of healthcare, like higher education, has continued to escalate year after year, outpacing wage growth and overall inflation rate

  • The Reality Is Your Healthcare Premiums Are Going Up—But How Much?
    • In 2017 monthly insurance premiums are projected to rise by an average of 25% for plans obtained through Obamacare or HealthCare.gov exchanges
      • That’s over 3X the 7.5% increase from 2015 to 2016!
    • Some states will see sharper increases than others
  • States with serious increases share similar traits
    • Less expansion in Medicaid
    • Low number of active insurers
    • Larger rural populations which cost more to cover
  • Where Are Premium Hikes Coming From?
  • Enrollment is lower than initially predicted
    • Even with the draw of goverment assistance, not as many healthy people are signing up for Healthcare.gov plans as projected
  • Insurers report patients are sicker than estimated
    • Policies have largely been taken out by older/less healthy people who are more expensive to insure
  • “Guess factor” led to mispriced plans
    • Insurers underestimated the costs of medical care to new customer pool so higher rates will cover reconfigured costs
  • Decreased competition as major insurers pull out of exchanges
    • UnitedHealth is exiting exchanges in 31 of 34 states
      • $650 million anticipated loss 2016
    • Aetna is pulling out of 11 of 15 states where it currently offers ACA coverage
      • $430 million loss from ACA policies since 2014
    • Dwindling pool of insurers
      • 1 in 5 consumers on average will have a single insurer to choose plans from from

Though 85% of exchange consumers receive government assistance/subsidies, that’s not the case for everyone

  • Will Some Americans Be Hit Harder Than Others on Healthcare Premium Increases?
    • Individuals and Small Businesses
    • 10 million people shop through Obamacare exchanges and will be able to find a plan for

In 2016, total healthcare subsidies for people <65 will total more than $600 billion, but Obamacare’s coverage provisions alone will result in a net cost to the federal government of $110 billion

  • But 4 million people are ineligible for subsidies and will have difficulty finding affordable coverage
    • 7 million buy coverage directly from insurers
    • 5 million use exchanges/state equivalents but earn too much to qualify for assistance
      • g., Single, 30
  • $311.17
  • Large employer-based plans
    • 2017 monthly premium cost
  • Tax penalties are set to the max if you choose no coverage
    • $695 per adult
    • $2,085 per family
    • or 2.5% of adjusted gross income

Do you know what’s happening to your healthcare premiums?

Sources:

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