Premiums on ObamaCare plans in 14 major cities are set to increase by an average of 4.4 percent in 2016, according to a new analysis.
The analysis from the nonpartisan Kaiser Family Foundation looks at 14 cities where complete data on rates from all insurers on ObamaCare’s marketplaces is available, and will be updated as more states release data.
While the average increase is relatively modest, some cities are seeing much larger spikes. It is also clear that premiums are increasing more than they did last year, when premiums in these 14 cities on average actually fell by 1.3 percent.
On Thursday, Minnesota announced that its premium rates would increase by as much as 49 percent, news that was seized on by Republicans.
Minnesota Commerce Commissioner Mike Rothman said the state approved the higher rates because the insured population ended up being sicker and more costly than insurers expected.
President Obama has pointed to the “rate review” process, where states can reject insurers’ proposed increases if they are deemed unreasonable, as a way of controlling rates, but Rothman said the insured population was sick enough that insurers were paying out more than they took in.
“In this market environment, the rate review process alone is limited in what it can do to restrain rate increases,” he said.
Still, Minnesota said its rates would remain some of the lowest in the country.
Insurers also got bad news on Thursday night, when the Obama administration announced that they will receive only 12.6 percent of the funds they requested under an ObamaCare program meant to cushion them from heavy losses.
The program in question is called “risk corridors” and intended to protect insurers on the health law’s marketplaces from heavy losses or having to spike premiums due to uncertainty as the law gets under way. The program takes money from insurers faring better financially on the exchanges and gives it to insurers faring worse.
The administration announced Thursday that insurers requested $2.87 billion under the program for 2014, but there was only enough money received to pay out $362 million.