WACO, Texas (KWTX) A report released Monday by the Obama administration says “Obamacare” premiums will see a sharp increase next year. Before taxpayer-provided subsidies, premiums for some plans will increase an average of 25 percent.
Dr. James Henderson, a Professor of Economics at Baylor University, said one of the reasons premiums are increasing is because there are not enough young and healthy people enrolling in the healthcare marketplace.
"The reason being is that the premiums are costing a lot more than their expected spending is for a year,” Henderson said.
The report released by the Obama administration also detailed how the number of insurers serving the federal market will drop from 232 to 167 in 2017, a loss of roughly 28 percent.
“This year you will have fewer choices and your premiums will be higher because less competition just means higher prices,” Henderson said.
Obama administration officials said that despite the large increases in premiums, there are subsidies designed to rise alongside premiums which will keep most consumers costs relatively low.
But Henderson said only people who sit below 250% of the federal poverty level will qualify for those subsidies.
“It just depends on where you are on that income break,” Henderson said.
“If you are more than 250% above the federal poverty level you’re going to see big increases where as if you are less than 250% you are going to be moderated quite a bit by the subsidies you receive.”
The increase in subsidies has to be funded some way and conservatives argue taxpayers will carry the bulk of that burden.
“The money has to come from some place, so it will either come from reductions in spending in other areas or we will have to consider tax increases,” Henderson said.
Experts said there are key elements people need to look at before choosing which plan to sign-up for. First, look at the premium and calculate what it will cost you relative to what your estimated health care expenses for the year will be. Next, look to see if your current physicians are covered on the plan that you are looking at. Also, make sure any prescription drugs or treatments that you are currently receiving are still covered on the plan you are looking at.
Sign-up season begins Nov. 1 and people can already look at plans that are offered in their areas.