Don’t get too comfortable with your health insurance premium. Many companies experienced losses as they battled the challenges of the Affordable Care Act, and analysts predict that these losses will cause health insurance premiums to rise dramatically in 2017.

Companies Seek to Balance Out High-Risk Individuals

Under the new care laws, U.S. insurance companies cannot deny coverage or charge more for individuals who have risky medical histories. While many popular insurance companies knew these individual enrollees would cost more, they still ended up having higher health costs than predicted. Since the companies cannot increase the costs of just high-risk enrollees, they must increase the premiums of all enrollees across the board.

Higher Drug Costs

Another cost that is affecting premiums is prescription drug costs. Healthcare costs continue to rise, and with this trend, more high-cost specialty drugs are hitting the market, including new drugs to treat cancer. Prescription drug costs are expected to surpass all other medical costs.

Insurance Companies No Longer Reimburses

Since 2014, the federal government has reimbursed health insurers for enrollees that cost the companies more. However, this reinsurance program will cease to exist in 2017, which only increases health companies’ losses. The Academy of Actuaries projects that this change alone will increase claims by 4-7%.

The Change in Health Insurance Companies

The rate increase will vary by state and health care company. Some companies will drastically boost its premiums while others will only experience a minor increase. For example, Providence Health Plan, which is currently the largest insurer in the Oregon health exchange, proposed an average increase of 29.6% in premiums.

On the other hand, Anthem Inc. will propose modest changes at an average increase of 15.8%.

Many big health insurers are also cutting back their service areas and decreasing the number of states they insure. UnitedHealth Group Inc. plans to pull its coverage from all but a handful of the 34 states that it was currently offering exchange plans in. Humana officials are following suit and say that they will exit the Affordable Care Act insurance exchanges in some states in 2017 to balance out recent financial losses.

What Does This Mean for You?

A lot of big changes are happening in the health insurance industry this year. Expect to see increased health care costs and fewer insurance company options. The Bulletin reported that there will only be three health insurance companies that service Central Oregon in 2017, which is a dramatic drop from the nine carriers that sold policies in 2016.

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