Health care costs will likely increase significantly for many Americans in the coming days as lawmakers passed a healthcare bill that did not extend subsidies. The situation leaves some states in the Mountain West trying to soften the financial blow for their residents.
People with low incomes will be hit hardest when the COVID-era subsidies expire, facing up to a 200% increase to their premiums. That’s according to Talon Abernathy, a health insurance analyst with Value Penguin by LendingTree.
“When you look at someone who earns $30 thousand per year, they will see a rate increase of 53%,” said Abernathy. “That is very high. But when you look at states that do not have state level subsidies, this income group in some states, we’re looking at like a 200% increase.”
Some states in the Mountain West, including Colorado and New Mexico, are offering state subsidies that will offset the upcoming hike in premiums.
And Idaho will have among the lowest rate increases as it uses a unique coverage called a “reinsurance scheme,” explained Abernathy.
“Lets say you need a very costly surgery. Maybe it’s a hundred thousand dollars. The state of Idaho would actually pay for that surgery and that enables health insurance companies in the state to keep insurance rates low for everyone,” said Abernathy. Idaho’s model, which utilizes some federal funds, is being studied by other states.
According to Lending Tree data:
In Arizona and Utah, rates are expected to rise above the national average. Arizona is seeing a 29% increase for full-price Silver-tier plans, which are the most popular plan type, compared to the 21% average increase nationwide. Utah is also seeing rate increases that exceed the national average. For example, some full-priced plans are up 22%, said Abernathy.
Some of the country’s most drastic hikes to health insurance exchange rates will likely be felt in Nevada and Wyoming.
Nevada’s rates are expected to increase 34% to an average of around $792 per month for a Silver plan. While increases will push Nevada to the 16th most expensive state nationwide for health insurance premiums, rates are still only modestly above the national average. Rates in Wyoming are estimated to increase 25% elevating monthly premiums to around $1,119 per month. But the state already has the second highest premiums in the country behind Vermont.
