Health Insurance Costs Rise, Putting Pressure on Middle-Income Earners
Health insurance prices are increasing, and it's not good news for many people. The government recently revealed the new prices for health plans under the Affordable Care Act (ACA) in 30 states.
Average Price Increases
- 30% in states where the federal government manages the plans
- 17% in states that handle their own markets
Impact on Consumers
Most of the over 20 million Americans covered by the ACA receive help paying for their insurance through tax credits. These credits make the plans more affordable. The help increased in 2021 but is set to expire next year unless Congress decides to extend it.
Factors Driving Price Hikes
- Rising drug and hospital costs
- Concerns about fewer young, healthy people signing up if subsidies end
Real-Life Example
Sue Monahan, a retired university administrator from Oregon, will see her monthly insurance cost jump from $439 to $1,059 if the enhanced subsidies expire.
"It’s not there for what you foresee; it’s there for the unexpected expensive events."
Open Enrollment Begins
Starting Saturday, Americans can begin choosing their plans for next year at healthcare.gov. Experts worry that some people might drop their insurance when they see the higher costs, even if Congress later renews the subsidies.
Who Will Be Hit Hardest?
- Individuals earning more than about $64,000 a year
- Entrepreneurs
- Small business employees
- Early retirees
Impact on Low-Income Individuals
About half of the people insured under the ACA have incomes near the poverty level. They currently pay nothing toward their premiums, but their costs will go up by around $25 to $85 a month.
Expert Insights
David Merritt, a spokesman for the Blue Cross Blue Shield Association, pointed out that younger, healthier consumers might think they don't need coverage. This could leave older and sicker people in the marketplace, making insurance more complicated and expensive for everyone.