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Your favorite Obamacare plans might not be so attractive in 2017.
Some of the most popular types of Obamacare health insurance plans want to raise their prices by an average of 10 percent or more in 14 major metropolitan areas next year, an analysis released Wednesday reveals.
There is a wide variation in the proposed prices of lower-cost so-called silver plans that were analyzed by the Kaiser Family Foundation, which also found that half of the markets it looked at would see a slight drop in the number of insurers selling plans.
The price changes range from a high of an 18 percent premium increase proposed for the second-lowest-cost silver plan in Portland, Oregon, to a low of a 13 percent price cut for such a plan in Providence, Rhode Island.
But in most of those areas, the proposed prices for the two lowest-cost silver plans would increase by a steeper rate than Obamacare plans have risen in past years — with double-digit hikes being common, Kaiser's report said.
Last year, premiums for the second-lowest cost silver plans actually grew by an average of 5 percent in the same cities, after the proposed price increases were reviewed and adjusted in some cases by state insurance regulators, according to the analysis.
In contrast, prices for the lowest-cost silver plans in the cities are proposed to increase by an average of 11 percent next year. And insurers want the second-lowest cost silver plans in those cities to increase by an average of 10 percent, Kaiser found.
Almost 70 percent of people who buy plans on the government exchanges opt for a silver plan. Such plans cover, on average, 70 percent of their customers' medical costs, with customers owing the rest out of pocket. Silver plans are also the only type of Obamacare plans that give lower-income customers subsidies to lower their out-of-pocket health costs.
"Last year, HealthCare.gov premiums increased an average of just $4 per month after shopping and tax credits, and consumers will benefit from shopping and tax credits again this year," according to Benjamin Wakana, spokesman for the U.S. Department of Health and Human Services, which oversees Obamacare.
"This is just the beginning of the rates process, and despite headlines suggesting double digit increases, proposed rates aren't what most consumers actually pay because the vast majority of consumers qualify for tax credits that reduce the cost of coverage below the sticker price, and people can shop around and find coverage that fits their needs and budget," he said.
The price increases of the silver plans Kaiser analyzed reflect the retail cost of Obamacare plans for individuals and families, particularly those sold outside of government-run online marketplaces. Most customers on Obamacare exchanges get subsidies that insulate them from the effect of the cost hikes.
But an unsubsidized, 40-year-old nonsmoker in Denver who was already enrolled in the lowest-cost silver plan would be looking at a 14 percent price increase, from $266 per month this year, to $304 per month next year if he wanted to stay in the same price tier. If he lived in Portland, staying in the lowest-cost silver plan would go from costing him $240 per month up to $302 per month, a 26 percent hike.
But if he lived in Providence, the same plan that costs him $259 per month now would drop to $224 per month next year, a more than 13 percent drop.
Kaiser's analysis also detailed the average price change in Obamacare plans in the 14 cities since they went on sale for 2014 through the proposed prices for next year.
The average hike for the second-lowest-cost silver plans would be 4 percent in the markets since 2014 if the proposals are approved as-is. For lowest-cost silver plans, the average increase would be 5 percent.
Cynthia Cox, one of the authors of the research, said that she would expect regulators will, as they did in past years, lower at least some of the premium rate increases proposed for 2017.
"I would guess that the average will be slightly lower after rate review," said Cox, associate director of Kaiser's program for the study of health reform and private insurance.
But because of losses on Obamacare plans sold by a number of insurers, "I would expect that states would push back less on rate increases this year," Cox said.
Obamacare plans for 2017 go on sale Nov. 1.
The prices of silver plans are closely watched by Obamacare proponents and opponents because of their popularity, and because of their effect in determining the value of tax credits that most exchange customers get to help pay for their premiums. More than 80 percent of Obamacare customers have incomes that are modest enough to qualify for those tax credits.
The prices of the second-lowest-cost silver plans in an insurance market are used as a benchmark to determine the value of federal tax credits or subsidies that most Obamacare customers get to help pay for their plans. If a customer opts for plan that costs less than the benchmark, they will get more in the way of subsidies. Conversely, if they opt for a plan that costs more than the benchmark, their subsidy is less.
As a result of this, many Obamacare exchange customers who are subsidized can avoid getting hit by any price increases in 2017 by switching to a plan that costs less than the benchmark plan will.
"In most cases, they won't pay these" price increases, Cox said. "Taxpayers will."
But for "people who are off exchange and for people who don't get subsidies, even if they do switch they could get double-digit increases in some states," Cox said.
Kaiser's study found that the average number of insurers in the 14 markets analyzed would drift down from 5.9 issuers per market this year to 5.5 issuers per market next year. That's nearly one issuer per market less on average since 2015, and a return to the average number of issuers per market seen in 2014, the first year that Obamacare plans went on sale.