ObamaCare costs will jump next year for exchange customers, one way or the other. Premiums are set to spike by more than 20% in at least 16 states. But, for many, the real sticker shock will be soaring deductibles that mean they'll get few benefits until they've racked up huge bills. Low-end bronze plans have deductibles hitting $6,850 in 2016. Now insurers are hiking silver-plan deductibles as high as $6,500 as a way to keep a lid on premiums. The downside isn't just more out-of-pocket costs for patients; it also will have a ripple effect of reducing taxpayer subsidies for cheaper plans.
Take Indiana, where average premiums are set to rise just under 1% on average, tied for the lowest in the nation, according to ACASignups.net. The cheapest silver plan in Indianapolis will actually fall by 6%, but that doesn't necessarily mean customers will get a better deal. This year's cheapest silver plan, from CareSource, has a $3,500 deductible. But in 2016 the cheapest plan, from Ambetter, will have a $6,500 deductible — an 86% jump. Nationally, individual market premiums will rise 12.5% on average, according to an analysis by Charles Gaba of ACASignups.net. Yet customers in many states will be able to avoid big premium hikes by switching plans. That's because some of the biggest increases are coming from plans that attracted a lot of customers by setting rates too low to cover the medical costs. Seattle's Big Needle The Kaiser Family Foundation looked at 2016 premiums in major cities of 13 states plus D.C. and found that the cost of the second-cheapest silver plan would rise just 4.4%. A big reason is because Seattle's is set to drop by 10.8%. But here's what the Kaiser researchers didn't say: The deductible for Seattle's second-cheapest plan will soar 175%, from $2,000 this year to $5,500 in 2016. Meanwhile, the out-of-pocket maximum will jump 30%, from $5,000 to $6,500. As for Seattle's cheapest silver plan — also from Ambetter — it will have a $6,500 deductible. Ambetter plans, operated by Centene (CNC) in a dozen states, aren't the only silver plans with deductibles of $6,000 or more. Blue Cross and Blue Shield plans in Illinois and Texas, both part of Health Care Service Corp., offer silver plans with $6,000 deductibles in 2015, though those plans offer more extensive benefits before the deductible than will be available under the Ambetter plans in 2016. MRI Coverage MIA Customers who choose Ambetter's $6,500 deductible plan in Indianapolis will get limited benefits such as primary-care visits at a cost of $30, specialist visits for $60 and generic drugs for $15, along with free preventative care such as vaccines. But big-ticket items like diagnostic testing, MRIs, specialty drugs, emergency-room visits and surgical procedures aren't covered until after a patient racks up $6,500 in in-network bills. The Ambetter plans also stand out in another way: By offering the two lowest-cost silver plans in the Indianapolis market with ultra-high deductibles, the insurer is driving down the subsidies available to purchase either more comprehensive coverage or lower-cost bronze coverage. That's because the size of exchange subsidies depends on the price of the second-cheapest silver plan in each market. Largely because two Ambetter plans are priced so low, the subsidy available to 30-year-olds earning 250% of the poverty level in Indianapolis-area Marion County will fall from $1,140 this year to $809 in 2016. That will hike after-subsidy premiums for the cheapest bronze plan by 25% to $1,914 a year. The same thing will happen in Seattle-area King County, where smaller subsidies and higher bronze premiums will boost the after-subsidy cost of the cheapest bronze plan by 21% to $2,112 a year — three times ObamaCare's minimum $695 individual-mandate tax penalty for going uncovered in 2016. Given that the cheapest bronze plan, also offered by Ambetter, has a $6,800 deductible, chances are high that young adults will pay the fine. Silver plans are the most common exchange selection because customers with incomes up to 250% of the poverty level are eligible for extra subsidies that lower out-of-pocket costs. Even with these extra cost-sharing subsidies, people earning from 201% to 250% of the poverty level would face a $4,500 deductible under the cheapest Ambetter silver plan. ObamaCare Shopping Season With the 2016 ObamaCare exchange shopping season set to start on Nov. 1, it will soon be clear whether Ambetter is taking the same tack in other states where it competes, including Florida, Texas, Georgia, Illinois and Wisconsin. IBD efforts to contact Centene were unsuccessful. In general, insurers treat premium-pricing strategies as proprietary. Customers around the country can expect to see substantial, though more modest, increases in deductibles and out-of-pocket costs. For example, California's bronze deductible is rising to $6,500 from $5,000. In Baltimore, Md., the deductible of the cheapest silver plan will jump from $1,750 to $2,750. Meanwhile, the deductible of Baltimore's cheapest bronze plan will jump from $6,000 to $6,550.