As had been predicted, insurance rates for plans that are attached to the Affordable Care Act participants have gone up anywhere from 8% to 25% depending on which area of the country you live in. The premium for my plan is going up 10% come January.
There have been many articles in the news proclaiming that the ACA plans aren’t all that affordable. I’m here to try to allay some fears and point out some truths. I brought up a couple of truths earlier this year with this post on realities of the plan after 4 months and this post on signing up to begin with.
The first truth is that insurance plans almost always go up, no matter if it’s ACA associated or not. In California before ACA, some plans used to go up more than 50%, and that’s after insurance companies requested increases as high as 95%.
In this case there’s at least one extra reason why some plans have gone up. With it being the first year of offering the plans and trying to gain subscribers, it was more of a feeling out process to see how many people would sign up for the plans and whether estimated costs were at least close to what had been expected. There were a number of insurance companies that decided to get out of the program because they had few takers, and others that realized they couldn’t keep up with the demand, which was higher than the government had expected.
The second truth is that in many of the larger cities, the silver plan, which is the standard that all other plans are based on, is actually going down by average. Nashville is decreasing by 8.7%, which is the top discounter.
The third truth is that for people who got subsidies to help pay for their insurance coverage, higher premiums likely mean they’ll get bigger subsidies to help offset the higher costs. No idea on how much this could possibly be, and it seems likely that in areas where costs go down their subsidy would also go down. Whether this means more or less out of pocket… who knows yet.
The fourth truth is that by now, if your income has remained pretty much the same, you should be used to making the payment, so even with an increase it shouldn’t impact you all that much. It’s like working at a large employer that’s paying for a portion of your insurance, where even if they’re covering 80% of your premium there’s more coming out of your pocket for the next year. We always find a way to deal with it; same thing here.
The unknown is always more scary than the reality. This is how things occur; there’s nothing new about a premium increase. Once you accept that you’ll feel a lot better.