(Bloomberg) --The Trump administration’s efforts to loosen health insurance rules will increase premiums for Obamacare plans by double-digit percentages in most states next year, according to a new analysis by the Urban Institute.
Monthly payments for a traditional health insurance plan sold through Obamacare will go up by 18 percent, on average, in 43 states where there aren’t limits on less-comprehensive but less-expensive coverage the administration is calling for, according to the Washington-based policy group.
Expanding access to short-term health policies, which can place limits on benefits and charge higher rates to sick people, draws healthy people out of the insurance pool. The tax law signed in December eliminated the requirement that all Americans have coverage or pay a fine. Combined, the result is higher premiums for those who continue to buy under the Affordable Care Act.
About 2.5 million people would drop out of the market for comprehensive health coverage under the plan the administration announced last week, according to the Urban Institute. The Trump administration projected that the drain from expanded short-term plans would be smaller, shifting only 100,000 to 200,000 people out of Obamacare in 2019.
Less Expensive, Less Coverage
Consumers will start shopping for 2019 coverage during the run-up to the 2018 mid-term elections on Nov. 6. Many Republicans favor expanding the market for low-cost policies that offer consumers fewer protections, while Democrats argue that such health plans undermine the market for comprehensive coverage.
The premium increases the Urban Institute researchers modeled don’t reflect other factors such as the rising cost of health care, so the actual prices could go up or down more than projected.
States that don’t allow short-term policies, including New York, New Jersey, Oregon, Vermont and Washington, would see more limited increases, according to the projections. Massachusetts, which bans short-term plans and has its own individual mandate, would not be affected by either policy change at the federal level.