The average premiums for silver-level benchmark plans sold on the federal HealthCare.gov website will go up 7.5% in 2016. Rates vary wildly, though, among states and metropolitan areas.
The benchmark plans, or second-lowest-cost silver plans, determine the value of a premium subsidy, known as the advanced premium tax credit in government parlance. Roughly 84% of people who bought health coverage on HealthCare.gov received a premium subsidy, according to the latest CMS data. The average subsidy totals $270, which covers about three-quarters of the average monthly premium.
According to data released Monday, the average benchmark premium will increase 7.5% across all 37 states that use the federal marketplace. However, the numbers are all over the board. In Indiana, premiums for those plans will decrease by almost 13% on average, while in Oklahoma, benchmark plans will soar by roughly 36%. Rural states tend to have higher average premium hikes, according to the data.
Significant variation also exists depending on metro area. Benchmark plans for people who live in the Cleveland area will go down by 6% on average. People living in the Miami metro area, one of the most populous for exchange enrollees, will see benchmark rate increases of only 2% on average, the CMS said.
Health insurance experts have said the marketplace works best if people shop for better deals, although that requires people to willingly give up their doctors and overlook brand loyalty in favor of cheaper insurance. The federal agency emphasized that most people won't be slapped with lofty rate hikes.
“For most consumers, premium increases for 2016 are in the single digits, and they will be able to find plans for less than $100 a month,” Kevin Counihan, CEO of the government's health insurance marketplaces, said in a news release.
But the price of health insurance next year is undoubtedly higher than the modest increases recorded in 2015. The impact is also likely to be felt more in states that had health insurers pull out of the marketplace. For instance, nine of the Affordable Care Act's not-for-profit co-op plans have folded this year. Benchmark premiums in several of those states, including Oregon and Louisiana, will be higher than average.
The data could change. The information released Monday was current as of Oct. 19. Open enrollment starts Nov. 1 and ends Jan. 31, 2016. The CMS has not yet released its larger data set that shows premiums and cost-sharing for all 2016 plans.