Obamacare Premiums Are Going Up. Here's Why It's All Going To Be OK.

Read the fine print.

The Affordable Care Act — also known as Obamacare — allowed millions of Americans to finally receive health insurance.

This week, the White House announced that the average Obamacare premium in the 39 states served by HealthCare.gov will increase by an average of 25 percent in 2017. The rate increase was not a major surprise — especially for Republicans calling to repeal the act.

Days before the announcement, Republican presidential nominee Donald Trump lashed out against the cost of Obamacare by tweeting a photo of a written notice explaining that someone's monthly healthcare premium will increase.


But what Donald Trump — and other critics of the Affordable Care Act — may not understand is that the 25 percent average premium hike only applies to less than 2 million people. And there's one major reason not to freak out about the premium hike: government healthcare subsidies will also increase.

A recent report from the Department of Health and Human Services reveals that 84 percent of consumers on the exchange receive financial assistance — and 77 percent use those tax credits to enroll in a plan for $100 or less each month.

The added savings are explained by the marketplace tax credits adjusting to match changes in premiums. And of the 1.3 million Obamacare consumers who did not receive financial assistance last year, 22 percent of them will qualify for tax credits in 2017.

Additionally, consumers on the exchange could reduce their premiums by 20 percent if they switched to the lowest premium plan and used their tax credits.

As for the overall price tag for an Obamacare plan, they are still roughly in line with the projections by the Congressional Budget Office. Plans on the public healthcare exchange are generally more affordable than plans found in the private marketplace.

And best of all, the number of uninsured Americans is at a record low, thanks to Obamacare.

Just some food for thought the next time Trump tweets about the affordability of the program.


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