Obamacare premiums to jump sharply

The cost of Obamacare coverage for individuals and families will rise an average 20.5% in Virginia next year, according to requests for new premium rates filed by health insurance companies.

That means it's likely that more than a third of the nearly 415,000 Virginians now covered by individual Affordable Care Act policies will go without next year, a review of proposed rate increases by the State Corporation Commission Bureau of Insurance says.

The bureau said premiums will rise by an average of 11.2% for people covered through Affordable Care Act small-group policies.

The main reason for the rise in individual coverage is the end of the COVID-era enhanced premium tax credit, the bureau said.

The premium tax credit, which saved an average of $87.80 a month on the average $498.89 that Virginians pay for Affordable Care Act policies, expires at the end of the year. The Republican majority in Congress declined to extend it in President Donald Trump's One Big Beautiful Bill Act, and so far it is not clear whether legislators will act.

Insurers suggest that without the tax credit, many will skip insurance coverage. Those who are covered will be less healthy than those who leave.

Without the credit, and with increases in illnesses and hospital and drug costs, the average premium next year will be $594.98, the bureau reported.

The lack of the credit accounts for most of that $96.09 increase. A rise in the severity of illnesses treated and increases in hospital and pharmacy costs are also boosting the costs insurers project covering, the bureau said.

Small group coverage did not benefit from the credit, while the increase in illnesses insurers reported for these policies was somewhat smaller.

The variables

What Virginians actually pay depends on their age, how many people are covered by their policy, how much they are willing to pay out of pocket for care and where they live.

Any increases would have to be approved by the Bureau of Insurance.

It looks at whether premium rates represent a fair deal for people; the key measure is how much of the premium revenue insurers collect is paid to cover care.

The bureau also looks at whether insurers' proposed rates generate enough income that they can meet their promises to pay for coverage. If rates are too low, the concern is insurers might go under and leave the rest of the state stuck with the bill.

Proposed increases

Insurers proposed a wide range of average increases. HealthKeepers, which has the largest share of the Obamacare market, echoed others in explaining its 20.4% proposed average increase, saying that the expiration of the credit "will increase the out-of-pocket premium paid by consumers to the extent that many may forgo coverage rather than paying increased premiums."

That means, HealthKeepers added, that "The remaining people in the pool are likely to be less healthy than those who leave, meaning more claims per person enrolled."

The insurer with the second-largest share of the market, Sentara, proposed an average 20.6% increase; No. 3 Kaiser, an 11.6% increase; and No. 4. Cigna, a 22.3% increase.

Virginia's innovation reinsurance program aims to cut individuals' premiums by about 15% from what they would otherwise be by reimbursing health insurers for some of the costs of relatively large claims.

Without the reinsurance program, next year's average monthly bill would be $711.70, the bureau said.

Dave Ress (804) 649-6948 dress@timesdispatch.com