What’s more is that premiums are expected to continue increasing through 2017 and beyond. That’s when the Affordable Care Act’s two central cost-concealing provisions—and the associated taxpayer handouts—will expire.
The first is called “re-insurance,” which uses taxpayer dollars to subsidize the highest-cost patients. The second is “risk corridors,” through which insurers are compensated for higher-than-anticipated costs—like they experienced in 2014 and 2015. Once these programs expire, the lost revenue will have to be replaced—and it will come directly in the form of higher premiums. Dr. Stephen Parente of the Carlson School of Management at the University of Minnesota has estimated what families and individuals can expect to pay.
Using a health insurance simulation model funded in part by the U.S. Department of Health and Human Services, Dr. Parente estimates the expiration of these programs will cause average premiums for middle-of-the-road silver plans to jump another 12.1% and 9.2% for individual and family policies, respectively, in 2017. And the years after that will only see further hikes.