Question: I read an article that said rates of individual insurance would go up as much as 60%. Won’t that erase the savings from subsidies?
Answer: A new study released on Tuesday by the nonpartisan Society of Actuaries estimates that individual premiums will rise 32 percent over 2013 rates on average nationwide within three years, 2014 - 2016, partly as a result of higher risk pools (more sick people in then insured population). Changes would vary by state, from an 80 percent hike in Wisconsin to a 14 percent reduction in New York. For anybody eligible for subsidies, their contribution to the total premium is fixed on a range between 2% and 9.5% of income. So, for the subsidized, it doesn’t make any difference what the final rates are. On an individual basis, age and income will determine how much of an increase. The subsidized group are likely to pay about 47% to 84% less in monthly premiums compared to 2013. The un-subsidized young (below 40) and will see the highest premium increases. Some of older un-subsidized group will have lower premiums than today for better coverage. On a positive note for the un-subsidized, coverage will be more comprehensive for all, meaning less out-of-pocket costs thus reducing the impact of higher rates.