New Worries About 2017 Health Premiums

Hold on tight. Health care costs as we head into 2017 will be a bumpy ride — especially for your bottom line.

Another major health insurer announced this week that it’s seeing only slim profits on individual health care plans and there is an expectation of losses overall for 2016. The first quarter earning report for Humana Inc. has company officials falling in line with other insurers and analysts, warning health care consumers that higher premiums and copays are coming in 2017.

The Louisville, Kentucky-based insurer, which is being sold to Aetna, currently sells individual plans in 15 states. Humana execs indicated on Wednesday, however, that it might leave some of the Obamacare health exchanges over the losses.

The news comes only weeks after the U.S.’s largest health insurer, UnitedHealthcare, announced it will pull out of the Affordable Care Act’s pool of providers in all but a few states.

“I’m not surprised,” Mark Wilson, chief economist at the American Health Policy Institute in Washington, D.C., told LifeZette. “It’s going to continue at least for the next 3 years — until the exchanges have a chance to stabilize without the government reinsurance programs or the risk adjustment programs in place.”

While we may hear more about losses with each quarterly earnings report, Wilson said he doesn’t anticipate any more major announcements like Humana or UnitedHealth in 2016.

Still, the situation indicates that bigger problems may lie ahead.

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“The fact that the health insurance tax was suspended for one year in December of last year — that gives them $60 billion more than they had last year to work with this year. It goes a long way toward helping them out. So the fact that they’re still losing money and still thinking about dropping out of the exchanges — this suggests they have long-term concerns in the individual exchanges,” Wilson added.

While patients appear somewhat apathetic at the moment to what is happening with these insurers — even to their own bills, until they get them in the mail — Wilson anticipates a wake-up call is coming.

“In 2017 they can expect narrower networks, higher premiums, and higher out-of-pocket expenses. Taxpayers can also expect [that] the federal government is going to be shelling out a lot more for the subsidies. Those are the four things they can expect,” said Wilson.

A lot of the price increases will be hidden from consumers and the exchanges because they’ll be subsidized based on their income level, said Wilson.

Providence Health Plan in Oregon is seeking an average increase of 29.6 percent.

“If you make just above the poverty level, you’re heavily subsidized, so the taxpayer bears a lot of the price increase. The consumer will see a little bit, but is going to be shielded primarily by the subsidy from taxpayers. On the other hand, if you’re well above the poverty level, you’re receiving very little subsidy, or a much lower subsidy, if any at all. Therefore those consumers will bear the brunt of any price increases,” said Wilson.

Insurers continue to claim that higher-than-anticipated health care costs — plus patients who are sicker than anyone might have guessed — are among their biggest challenges to staying viable under Obamacare. Insurers can’t deny anyone coverage or charge someone more for their plan based on the amount of care they may need.

Oregon and Virginia are the first two states to go public with proposed premiums for 2017, The Wall Street Journal reported.

Providence Health Plan in Oregon is seeking an average increase of 29.6 percent.

Anthem Inc. in Virginia is asking for an average increase of 15.8 percent.

But there’s no word yet on how much Humana may increase its rates. The company offered the following statement on Wednesday: “Humana anticipates proposing a number of changes to retain a viable product for individual consumers, where feasible … Such changes may include certain statewide market and product exits both on- and off-exchange, service area reductions, and pricing commensurate with anticipated levels of risk by state.”