Washingtonians buying insurance through the state’s health-insurance exchange will see the largest premium increases next year since the exchange was created in 2013.
The Washington Health Benefit Exchange board this week approved rate increases averaging 24 percent. The rates, first approved by the state’s Office of the Insurance Commissioner, will impact about 180,000 customers.
“We at the exchange understand that, yes, this is going to create a challenging environment that is going to be difficult” for customers, said Michael Marchand, chief marketing officer and spokesman for the Washington Health Benefit Exchange, which was created after the Affordable Care Act (ACA) passed in 2010.
Customers of the exchange will also have fewer insurance providers to choose from in 2018. In King and Pierce counties the number drops from seven to four, Snohomish County goes from six to three and Kitsap County from four to three.
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Rate increases averaged 11 percent last year, 4 percent in 2016 and 1 percent in 2015.
Why the large increase compared with years past?
Marchand points primarily to rising medical and prescription-drug costs. But the debate in Washington, D.C., about scrapping or changing the ACA, also known as Obamacare, is creating uncertainty with customers and insurers.
Marchand said the unknown future of the individual mandate, which requires people to be insured, and not knowing if the federal government will continue to pay cost-sharing payments to insurers is impacting the exchange.
The payments reduce costs of some exchange plans. President Trump has said he might end these payments, which would force the insurance companies to pass them along to consumers.
While the average rate increase is large, Marchand stressed that about 60 percent of exchange customers could have their costs offset by tax credits granted to consumers based on income.
The Washington exchange is trying to make it easier for customers to find the best and most cost-effective plan with a new tool. The Smart Pathfinder was launched this week and was created to help people shop for plans.
The exchange makes up only a portion of the insurance market. Most consumers get insurance through their employer or through Medicaid or Medicare.
Another 317,000 people buy their insurance from the individual market. The Office of Insurance Commissioner Mike Kreidler will set rates for those plans in mid-October.
It is exploring legislation that would have the state to take advantage of a section of the ACA that allows states to apply for federal dollars. The money would be used to stabilize the individual market, with a focus on rural areas where plans are more limited.