4 facts about Obamacare premiums you should know before you start freaking out

Putting the dramatic headlines in context.

The HealthCare.gov website, where people can buy health insurance, is displayed on a laptop screen in Washington. CREDIT: AP Photo/Andrew Harnik, File
The HealthCare.gov website, where people can buy health insurance, is displayed on a laptop screen in Washington. CREDIT: AP Photo/Andrew Harnik, File

Just in time for the impending 2016 presidential election, a fresh round of dire headlines about rising Obamacare premiums is giving Republican lawmakers a new opportunity to attack the health care law.

But — as with most news about Obamacare, which has been a prime target for GOP politicians for the better part of the past eight years — the full context is more complicated than the law’s opponents would have you believe.

The latest headlines are in response to an announcement from the Obama administration on Monday that the cost of a plan under President Obama’s signature heath law is expected to rise an average of 22 percent in 2017.

GOP presidential nominee Donald Trump was quick to seize on the projected double-digit increase to emphatically declare that Obamacare is “over.” During an appearance on Fox News, Trump added that the law “is so bad for the people and they can’t afford it.”

To be sure, some of the concern is valid. Hefty price increases are a problem for Americans struggling to afford their monthly premiums, and there’s some evidence that certain aspects of the health law aren’t working perfectly.

Nonetheless, there are a few key pieces of context that help put the news about Obamacare’s price hikes into perspective.

1. Yes, premiums are going up — but so are subsidies.

Critically, Americans won’t need to shoulder Obamacare’s premium increases on their own. Most people who are insured through Obamacare’s state-level marketplaces don’t pay for the full price of their premiums because they get an assist from the government in the form of subsidies. These federal subsidies to help offset the cost of buying insurance are also going to rise. According to the Obama administration, even with the projected increases, more than 70 percent of people buying insurance on the marketplaces will be able to get a plan for less than $75 a month next year — provided they take advantage of the subsidies available to them and select a low-cost plan with more limited benefits than other options.

2. The government expected Obamacare premiums to rise.

Price increases for Obamacare plans aren’t entirely unexpected. The law’s state-level marketplaces are still very new, and were expected to take a few years to find their footing as insurance companies attempt to accurately predict premium costs among a new pool of beneficiaries. In fact, the estimated rates for 2017 rates are about the same level that the Congressional Budget Office predicted they would be when the law was first proposed. Essentially, insurance companies set initial prices for their plans that turned out to be too low, and they’re now course-correcting.

3. The majority of Americans don’t get their insurance through Obamacare plans.

Although some news outlets are characterizing the news about rising premiums as a “November surprise” that could have a big impact on how Americans feel about the upcoming election, the reality is that these price hikes won’t affect the majority of the country. Most Americans get their insurance either through their employer or through a safety net program like Medicaid. A much smaller portion of the population — about 6 percent — buys private insurance plans on Obamacare’s marketplaces.

4. Obamacare needs to be improved, but its opponents keep standing in the way.

The health reform law — essentially, a messy compromise forged between our government and powerful insurance corporations — is certainly not perfect. Lawmakers on both sides of the aisle are worried about premium price increases squeezing Americans, and there’s broad consensus that the Affordable Care Act needs some improvements to help it function better.

But the loudest critics of the law are also the same people standing in the way of meaningful reform. Republicans have consistently pushed to scrap Obamacare altogether — a path forward that would create many more issues than the current premium hikes, seeing as it would leave millions of Americans with no access to affordable health care whatsoever. GOP lawmakers across the country have also blocked Obamacare’s Medicaid expansion provision, preventing the law from insuring additional low-income Americans, and have so far resisted the policy tweaks that Democrats have proposed as avenues to build upon the existing law.