Obamacare premiums to rise 22 percent, most will be shielded by tax credits

Obamacare premiums for the benchmark silver plan are set to spike by an average of 22 percent in 2017 based data for the states on the federal platform Healthcare.gov and the 5 state exchanges for which data was available, according to a report released Monday by the Department of Health and Human Services.

For states on the federal exchange, the average increase will be slightly higher at 25 percent. The numbers show the estimated increases in the second-lowest cost silver plan because that plan is the one the government bases its tax credit calculations on.

[Also: Absent Obamacare markets, UnitedHealth posts strong earnings]

In 2017, for a 27-year-old, the average premium will cost $296 a month compared to $243 in 2016. For the just the states that participate in healthcare.gov, the 2017 figure is $302 a month on average for premiums in 2017, versus $242 in 2016.

However, the report also stressed that marketplace tax credits adjust to account for the increases in benchmark premiums. Therefore, some consumers in areas that had low benchmark premiums in 2016 may be newly eligible for tax credits in 2017.

"Of the nearly 1.3 million HealthCare.gov consumers who did not receive tax credits in 2016, 22 percent have benchmark premiums and incomes in the range that may make them eligible for tax credits in 2017. In addition, an estimated 2.5 million consumers currently paying full price for individual market coverage off-Marketplace have incomes indicating they could be eligible for tax credits," the report said.

All in all, roughly 78 percent of consumers who are uninsured, who buy coverage from marketplace, or who purchase individual coverage outside the marketplace, have incomes that will make them eligible for for advanced premium tax credits that will significantly lower their monthly premium costs, the report said.

[Also: Trump could wreak havoc on Obamacare, legal experts say]

The report also showed that 72 percent of current marketplace enrollees will be able to find a plan that will cost $75 or less in premiums per month, after applicable 2017 tax credits. Also, 77 percent will be able to find a plan costing $100 or less in premiums costs per month after applicable tax credits.

"We find that, notwithstanding higher benchmark premium increases than in previous years, the majority of consumers will continue to have access to affordable coverage because they are protected by the combination of financial assistance and the ability to shop," authors wrote.

It is worth noting that while the average increase is 22 percent, there is enormous variation in the average changes throughout specific states. For instance, Arizona will be slammed by a 116 percent increase in average monthly premiums, from $196 in 2016, to $422 in 2017. Oklahoma will see a 69 percent increase, and Tennessee will see a 63 percent increase.

[Also: CDC: Uninsured rate hits all-time low, credit goes to Obamacare]

However, some states will see only nominal increases or actual decreases. Arkansas faces only  a 2 percent increase in their average monthly premiums, as does New Hampshire and Ohio. Indiana and Massachusetts will see 3 percent decreases in theirs, the report showed.

"Moderate rate increases or rate decreases … suggest that Marketplaces in states around the country are maturing and approaching stable price points. Meanwhile, several of the states experiencing larger increases had 2016 premiums that were well below the national average and especially far below the cost of comparable employer plans in that state."

However, while marketplace premiums are still mostly in line with projections set forth by the Congressional Budget Office, consumers, federal and state officials, and insurers will monitor marketplace activity and trends in 2017. This is particularly true in the case of the volume of payers and plans that will be available for consumers to choose from.

According to the report, there will be an average of 30 plans for marketplace consumers to choose from in 2017, with 167 insurers participating in the Marketplace in HealthCare.gov states in 2017. At the county level, the average Marketplace consumer will have three insurers to choose from in 2017, 79 percent will have two or more, and 56 percent will have three or more.

The ranks of payers offering health plans in the Marketplace shrunk from 2016 to 2017. Across the HealthCare.gov states, 15 new issuers on average will begin offering Marketplace plans in 2017, but 83 issuers that offered plans in 2016 will no longer do so.

"Reduced participation in large part reflects multi-state withdrawals by a few large insurers; in particular, withdrawals by UnitedHealth and Aetna account for 26 and 17 issuer exits, respectively. A number of other firms are entering the Marketplace or expanding their participation into new states (or new service areas within states), but they are doing so more gradually," the report said.

Twitter: @BethJSanborn