Will Obamacare be More Expensive in 2023?

Obamacare, officially known as the Affordable Care Act (ACA), has gone through many changes since it was first introduced in 2010. As we head into 2023, many are wondering if health insurance plans on the ACA Marketplace will become more expensive next year.

Premium Trends on the ACA Marketplace

The ACA Marketplace offers health insurance plans across different “metal levels” – Bronze, Silver, Gold, and Platinum. These metal levels indicate the general level of coverage and out-of-pocket costs, with Bronze plans having the lowest monthly premiums but highest potential out-of-pocket costs, and Platinum having the highest premiums but lowest potential out-of-pocket costs.

Over the past several years, average premiums for the benchmark Silver plans on the ACA Marketplace actually decreased slightly:

• In 2018, average benchmark Silver premiums increased significantly, up to $481 per month for a 40-year-old. This was likely due to uncertainty over ACA policy at the time.

• From 2019-2022, average benchmark premiums for a 40-year-old fell to $438 per month, as insurers corrected for overpricing in 2018.

However, for 2023, this trend is reversing:

• Average benchmark Silver plan premiums are increasing by 4% nationally in 2023, up to $456 per month for a 40-year-old.

• Average Bronze plan premiums are increasing 4% and average Gold plan premiums are increasing 2% in 2023.

So after years of relatively flat or decreasing premiums, Obamacare plans are seeing notable premium hikes in 2023 across metal levels.

Why are Premiums Increasing in 2023?

According to insurance company rate filings, there are two key factors driving these Obamacare premium increases for 2023:

• Rising Healthcare Costs: The cost of healthcare services, prescription drugs, and medical supplies continues to rise faster than overall inflation. Insurers cite these increasing costs as a major reason for hiking premiums.

• Rebounding Utilization: During the COVID-19 pandemic, people delayed or skipped preventive care and elective procedures, leading to lower than expected claims costs for insurers. In 2023, insurers expect healthcare utilization to rebound back to pre-pandemic levels, increasing claims costs and premiums.

Additionally, some insurers may be increasing premiums to regain profit margins, after seeing declining margins in recent years on Obamacare plans.

The good news is that premium increases are not uniform across all states or counties. Some areas will see relatively small increases or even decreases:

• Average benchmark premiums are decreasing in Virginia (-18%) and increasing most sharply in New Mexico (+15%).

• At the county level, some counties have double digit premium decreases, while others have double digit increases.

So the impact on your premium will depend greatly on your location and specific plan.

Out-of-Pocket Cost Changes

In addition to premiums, the other major component of health plan costs are out-of-pocket costs like deductibles, copays, and coinsurance.

The maximum allowed out-of-pocket limit for ACA plans is increasing by about 5% in 2023, from $8,700 to $9,100 for an individual. However, cost sharing amounts can vary significantly by plan within that limit.

To fully understand how your total costs may change in 2023, you need to look at:

• How your specific plan’s premium is changing
• How your plan’s deductible, copays, coinsurance are changing

You can review your plan details on Healthcare.gov during open enrollment or contact your insurer directly to find out if your out-of-pocket costs are increasing or decreasing next year.

Subsidies Buffer Premium Increases for Many

It’s important to remember that the majority of Obamacare enrollees receive subsidies that reduce their premium payments. So while the sticker price of plans may be increasing, what you actually pay is determined by the difference between your plan’s premium and your subsidy amount.

Thanks to expansions under the American Rescue Plan Act (ARPA) and the Inflation Reduction Act (IRA), ACA subsidies in 2023 are bigger and available to more people than ever before:

• Enrollees under 150% of the poverty line can get a Silver plan for free or close to free.
• Subsidies now apply to enrollees over 400% of the poverty line.
• Middle-income enrollees see lower premium contributions.

For those receiving subsidies, changes in the benchmark Silver plan premium (which subsidies are based on) matter most:

• If the benchmark premium increases more than your current plan’s premium, your subsidy will increase and offset a bigger portion of your premium.

• If your plan’s premium increases more than the benchmark, you may pay more unless you switch plans.

Overall, subsidies create much greater stability and affordability for ACA enrollees relative to unsubsidized consumers. About 85% of Marketplace enrollees receive subsidies, shielding them from the brunt of premium increases in 2023.

Actions for Consumers

Given all of these changes, here are some key steps ACA enrollees should take for 2023:

• Review Plan Details During Open Enrollment: Open enrollment runs from November 1, 2022 to January 15, 2023 in most states. Be sure to actively review and update your plan selection. Passively auto-renewing may put you at a disadvantage.

• Compare Multiple Plans: Prices and covered benefits can change significantly from year to year. Be sure to compare multiple plans at each metal level to find your best option.

• Factor in Subsidies: Log into Healthcare.gov or your state Marketplace and update your application to see your new subsidy amount and how much you’ll pay in premiums for 2023.

• Look Beyond Premiums: Consider changes in deductibles, copays, and total out-of-pocket costs when evaluating plan options, not just the premium.

• Get Enrollment Help: Work with a Navigator if you need assistance understanding plan options and subsidies in your area.

While Obamacare premiums are increasing nationally in 2023, don’t panic. Pay attention to your specific situation during open enrollment to find the most affordable option. For the majority receiving financial assistance, 2023 should still offer affordable health insurance through the Marketplaces.

Frequently Asked Questions

How much are Silver plan premiums increasing under Obamacare in 2023?

On average, benchmark Silver plan premiums on the ACA Marketplace are increasing 4% nationally in 2023. The average 40-year-old will pay $456 per month for a benchmark Silver plan in 2023, up from $438 in 2022.

Are Bronze plans getting more expensive under Obamacare in 2023?

Yes, on average Bronze plans are increasing by about 4% nationally in 2023. However, Bronze premium changes vary locally. Some areas will see decreases in Bronze plan costs next year.

Will I pay more for Obamacare coverage if I auto-renew my plan?

You may end up paying more in 2023 if you passively auto-renew your ACA plan. Premium subsidies can change year-to-year, so you may miss out on subsidy savings if you don’t actively update your application and plan selection. Shop around and compare all options.

How can I find the most affordable Obamacare plan options for me in 2023?

Go to Healthcare.gov or your state Marketplace website during open enrollment. Fill out your application to view your updated subsidy amount. Then use the website’s cost and plan comparison tools to shop for both premium costs and out-of-pocket costs like deductibles and copays.

When is the deadline to enroll in an ACA health plan for 2023?

Open enrollment for signing up for 2023 ACA Marketplace plans runs from November 1, 2022 to January 15, 2023 in most states. Some state-based Marketplaces have longer enrollment periods. Be sure to enroll by the deadline in your state.

If my income is low, will I get an Obamacare plan for free in 2023?

If your income is below 150% of the federal poverty level, you can enroll in a benchmark Silver ACA plan for free, or a low-cost Bronze plan for free, thanks to expanded subsidies. Be sure to check Healthcare.gov to confirm your subsidy amount.

Who can I contact if I need help deciding on an Obamacare plan?

You can work with a Navigator program in your area to get free personalized assistance with reviewing plans and subsidies. Navigators are enrollment experts certified by the Marketplace. Find one local to you using the “Find Local Help” tool on Healthcare.gov.