Health insurance price hikes loom with ACA open enrollment

The Affordable Care Act's open-enrollment season starts Nov. 1 and lasts through January 15, 2023, in most U.S. states. During that time individuals and families can browse various health-insurance plans and choose the ones that best suit their needs.

That's the boilerplate outlook. The reality is that Americans can expect significant price hikes when they choose health-insurance plans. Analysts expect the cost of these plans to rise as much as 8% in 2023, with rates varying state by state.

Given the fact that consumers have been dealing with inflation in 2022, it's no surprise that many health-care consumers are worried about rising medical-care and insurance costs heading into 2023.

According to a new study by Gravie, 86% of consumers are concerned that their health benefits will not cover part or all of their exams, treatments and procedures for this year.

Additionally, the report notes that 71% of consumers stated that their health plans don't "cover mental health, and two-thirds of consumers are concerned that their current mental-health coverage does not address the needs of themselves and their families."

"The evidence is clear -- consumers are feeling the pinch of a broken health-care system in truly tragic ways," said Marek Ciolko, Gravie co-founder and co-CEO.

"No one should be concerned about accessing needed medical care because of the administrative and financial barriers that their health plan puts in their way. The traditional system is long overdue for a change."

Changes On the Way in 2023

The big question for the 2023 open-enrollment season should sound familiar to U.S. consumers: How will inflation affect ACA health-insurance prices?

Americans won't like the answer. But at the same time, the general outlook isn't as bleak as one may think.

"Across all individual market plans, insurers proposed an overall average rate increase of a little under 8% for 2023," said HealthInsurance.org health policy analyst Louise Norris. "That average includes health-savings-account-qualified plans, but those are only a small fraction of the available options."

Health insurance rates are still being finalized in some states, but industry observers have seen quite a few states where the final numbers are slightly lower than the insurers had proposed.

"Most exchange enrollees qualify for premium subsidies, and subsidies grow to keep pace with the cost of the benchmark plan in each area," Norris told TheStreet. "If the benchmark plan costs more in 2023, subsidies for everyone in that area will also be larger, keeping their premiums at an affordable level."

Health-insurance consumers can also expect some changes in plan-contribution levels in 2023.

"First, the maximum contribution limit for HSAs is increasing from $3,550 to $3,600 for individuals and from $7,100 to $7,200 for families," said. Seniors Life Insurance Finder Chief Executive Linda Chavez. "This means you can contribute up to $50 more to your HSA next year if you're enrolled in a family plan."

Additionally, the minimum deductibles for high-deductible health plans are also increasing. "For individual plans, the minimum deductible is rising from $1,350 to $1,400. For family plans, the minimum deductible is increasing from $2,700 to $2,800," Chavez told TheStreet.

Out-of-pocket maximums for high-deductible plans are also increasing. "For individual plans, the out-of-pocket maximum is rising from $6,650 to $6,850," Chavez added. "For family plans, the out-of-pocket maximum is increasing from $13,300 to $13,700."

Subsidies Should Help Health Insurance Consumers

Health-care consumers have options if they're priced out of ACA plans this year. But that shouldn't happen to most Americans.

"Very few enrollees will be priced out of an ACA-compliant plan," Norris said. "Under the American Rescue Plan (extended by the Inflation Reduction Act), premium subsidies are available if the benchmark plan would cost more than 8.5% of your household income. This is applicable regardless of how high your income is in 2023."

Consequently, the vast majority of ACA platform enrollees do get subsidies.

"For those who don't, it's generally because the benchmark plan already costs less than 8.5% of their income," Norris added. "The benchmark plan is the second-lowest-cost Silver plan, so there are also Bronze plans and one other Silver plan that cost even less."

There are alternatives for people who genuinely cannot afford ACA-compliant coverage, including short-term health insurance and non-insurance like health care sharing ministry plans and direct primary care plans.

"These are not ideal and should not be thought of as an adequate long-term solution," Norris added. "But they are better than nothing."