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Signs point to rate hikes in public exchanges

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An early look at health insurers’ proposed 2017 premium rates shows they trump 2016 final premiums by 16% on average.

The analysis by consultant Avalere Health L.L.C. looked at insurers’ proposed premium rates across all silver public exchange plans in the eight states, plus the District of Columbia, where 2017 proposed rates so far have been made public.

The proposed premiums for the average 2017 silver plan is $521 compared with $447 in 2016, Washington-based Avalere found. But rate proposals varied widely by state: The average proposed rate increase for silver plans ranged from 44% in Vermont to just 5% in Washington, according to the analysis.

Silver plans are the most popular on the exchanges established by the health care law, with 68% of exchange members choosing a silver plan in 2016, Avalere said.

For the lowest-cost silver plan, proposed premiums increased just 7% on average, while the second-lowest cost silver plan premiums increased 8% on average, Avalere said.

“As in years past, proposed premium increases vary dramatically by state and by region within states,” Elizabeth Carpenter, senior vice president at Avalere, said in the analysis. “In most states, premiums for the lowest-cost plans appear to be rising less than for the silver metal level as a whole.”

Experts had expected premiums to jump in 2017 as health insurers work to turn a profit on exchange business. Health insurers were expected to raise premiums to respond to the less healthy exchange enrollees who have been accessing a lot of medical care and driving up costs.

In addition, premiums are likely increasing because two of the three government safety net programs — the reinsurance and risk corridor programs — are ending this year, Avalere said.

The health care law established the programs to help stabilize premiums and protect insurers from losses during the early years of the exchanges.

The finalized 2017 premiums could be much lower than the proposed rates as state insurance departments and insurers negotiate in the coming months, but Avalere said it still expects next year’s premiums to remain higher than 2016’s.

Avalere analyzed proposed premiums in the District of Columbia, Indiana, Maryland, Maine, New York, Oregon, Vermont, Virginia, and Washington.