Preliminary premium rate increase information is starting to become available for next year. I am reading many articles about what we can expect the rate increases will be for 2017. Some say the nationwide premium rate increases will be as much 60% in some locations. But, let’ face it, we here in Nevada care about what they will be here because this is where we live.
Only one health insurance company so far has told us what their premium rate increase requests are in Washoe County, about an 11% average increase across all their plans. Will that be typical of the rest of the health insurance companies? Probably.
Requested vs. Actual
But keep in mind that these are requested rate increases. The Nevada Division of Insurance has the ability to not approve the requested rate. Insurance companies generally are not able to request a premium rate increase next year to cover a loss they experienced this year. Next year’s rates are supposed to be based on what the insurance company expects next year’s costs to be. So, if the insurance company can show that they need higher rates to cover higher anticipated costs, the insurance division probably won’t withhold approval for the new rates. After all, the division has a duty to be sure the rates are adequate for the insurance company to make a profit and not go out of business or pull out of Nevada, like so many have done already.
About 70% of enrollees in the Federal Exchange chose Silver plans. These are middle ground plans in terms of benefits and price, between the Bronze and Gold plans. I would be surprised if any health insurance company offers Platinum plans in Washoe County in 2017. Premium tax credits are usually available for individuals and families who have gross income of 400% or less of the Federal Poverty Level. Silver plans are the only plans that, in addition to tax credits, have cost sharing reductions available. For those whose income is at or below 250% of the FPL, cost sharing reductions reduce the actual costs of using their plan for some items which can include doctor visits, prescriptions, deductibles, maximum out-of-pockets, etc. It is the combination of premium tax credits and cost sharing reductions that make Silver plans the most popular selection.
Rate Increases & Tax Credits
Those of you who receive tax credits are largely insulated from a premium rate increase because what you pay towards the premium is based on your earnings, not how much the total premium is. For you, if your income in 2017 is the same as 2016, and all else remains the same, you’ll pay roughly the same amount next year as you do this year. The government will pick up the premium increases.
It’s those who are not receiving tax credits who feel the full impact of a premium rate increase. For example, a family of two parents (early 40’s) and three kids under 21 has an average premium in 2016 of about $1210. An 11% rate increase would be $133 per month for a total annual cost of over $16,000. That’s a lot to handle if your income doesn’t go up in 2017. And for many Nevadans, it won’t.
For now we know there will be cost increases for many insureds. Until the rates are finalized, we won’t know exactly how much they will be. I will have a much better idea in the next couple of months once the approved rates are published.
Want to find the plan that has the lowest cost and best benefits for your health needs? Give me a call.
Individual and Family Specialist since 2002