The initial 2019 rate increases, compiled by the Kaiser Family Foundation, range from a modest 7 percent bump in Richmond, Virginia, to a 36 percent hike in Baltimore for so-called “benchmark” plans on which the law’s tax subsidies are based. (It’s too soon to say where the national average might end up, and every market is unique anyway.)
The primary culprits for the increases seem to be the repeal of the individual mandate penalty in the Republican tax law and the Trump adminstration’s expansion of non-Obamacare plans, in addition to the continued effect of President Trump’s decision to end the cost-sharing reduction payments to insurers. Some of this is also the general increases that we would expect for inflation and the actual medical costs insurers paid the year before.
By the looks of it, two important trends that came into sharp focus in 2018 are going to carry over into 2019:
- Because Obamacare caps the premiums that people who qualify for subsidies are required to pay, the federal taxpayer is going to be asked to make up the increasing gap between the gross premiums that health insurers are charging and the net amount subsidized customers pay.