Health insurance rates under the Affordable Care Act will jump an average of 25 percent in Texas and nearly 40 other states in 2017.
One in five consumers will also have to choose from a single insurer now that some national carriers are stepping back.
Melissa Renee Merket makes a living cutting hair. As of July, Merket was no longer covered under her parent's healthcare plan so she turned to the Affordable Care Act for options. Merket says she pays $479 per month for her healthcare plan and doesn't qualify for any government subsidies because she makes too much.
“Mainly I carry the insurance cause I'm penalized if I don't carry insurance,” Merket said.
Merket is one of millions of Americans covered under Obamacare who are bracing for even higher premiums next year.
“The program attracted a lot of sick people and we knew that it would. As a consequence, the real cost to insurers has been much higher than when their premiums were recently set,” said John McCracken, PhD, UTD Clinical Professor of Healthcare Management.
McCracken expects premiums in the Texas to exceed the national average increase of 25 percent.
“There's a lot of people, several million people, who are going to face the prospect of paying the premium increases out of their own pocket,” McCracken said.
Additionally, almost 30 percent of the insurance providers are dropping out of the program.
In talking with ACA navigators in Texas, McCracken says United Healthcare, Humana and Aetna are all withdrawing from the market in some capacity. United is only expected to offer short-term medical plans and Aetna may keep on existing customers. Cigna will reduce participation but to what extent remains unclear.
McCracken said Texans covered by Baylor, Scott & White and Blue Cross -- which is what Merket has -- should be able to keep their policies, but their premiums will go up.
Merket tells me she can no longer afford the premiums. But she considers herself lucky. Recently Merket found out she's eligible for healthcare coverage through her boyfriend's employer through domestic partnership benefits.
The Obama administration is stressing that subsidies provided under the law will rise to help insulate against the sticker shock.
But for healthy Americans who don't qualify for the subsidies, McCraken believes many of them will simply drop coverage all together. Those people can either take the penalty for not having health insurance or claim an exemption which can include a financial hardship or religious exception.