The price of individual health insurance under the Affordable Care act is going up an average of 22 percent nationwide for 2017. Government analysts had been predicting this, but New Jersey appears to be bucking the trend.
The cost of a basic individual health plan in New Jersey will rise about 7 percent next year. Meanwhile, those in Pennsylvania face a 51 percent increase for a similar Obamacare plan and Delaware residents will see a 19 percent increase.
Joel Cantor, a health policy professor at Rutgers University, pointed to two main reasons for the difference. First, coverage in New Jersey was already expensive in the first place. Even before the federal health law, New Jersey had a mandate to cover everyone, regardless of their health status. That rule kicked in nationwide when the law took effect in 2014.
Second, insurers in other states had previously underestimated how much care people would need and the associated costs of that coverage.
“One of the main drivers of the increases is how well the actuaries did in prior years. And I think the insurers in our market hit the target better in 2016 than insurers did in others states,” said Cantor.
Doing his own calculations of federal data, Cantor found that New Jersey had the ninth most expensive basic silver level plan this past year. That’s fallen to the 22nd most expensive plan for this coming year.
Like a lot of other states, New Jersey has lost marketplace competition. Three companies have dropped out, though Cantor said they had smaller shares of the market.
“Those players didn’t have a big market share, but it’s good to have more robust competition,” he said. “We’re down to two insurers. They’re the two big ones that have the been in the game from the beginning of the Affordable Care Act.”
The rate increases represent the average cost changes for one kind of silver — the marketplace standard — plan. Cantor and others advise consumers to shop around and review their individual plans for any changes.
The cost of gold-level plans are slated go up a lot more in New Jersey.
Those who qualify for income-based subsidies probably won’t experience much of the rate increases if they stick to a basic plan, even in Pennsylvania and other states where the rates are going up a lot more.
That’s because as the cost goes up, so too does the size of the subsidy.
Open enrollment begins on healthcare.gov Tuesday, but consumers can start previewing plans now.
Average costs and rates for Bronze, Silver and Gold level plans in Pennsylvania, New Jersey, and Delaware (Chart courtesy of healthpocket.com)