Why Your Monthly Health Insurance Costs Might Be 7% Higher in 2025
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Fact checked by Nick BlackmerFact checked by Nick Blackmer
Key TakeawaysHealth insurers offering Affordable Care Act marketplace plans are proposing a median premium increase of 7% for 2025.These increases are driven by factors like rising prescription drug costs, hospital care expenses, and inflation.Not all insurers will increase their rates, but it’s important to review your current plan.
If you have Marketplace health insurance, your premiums may get more expensive next year.Health insurers offering Affordable Care Act (ACA) plans recently filed preliminary rate increases with the federal government, with a median premium increase of 7% in 2025, according to an analysis by Kaiser Family Foundation (KFF).While not all insurers will raise their rates, it’s important to review your plan. Automatically renewing your current plan without checking for increases or comparing your options could cost you more money than it has to, said Marilyn Serafini, executive director of the Health Program at the Bipartisan Policy Center in Washington.
What Are Health Premiums?A health premium refers to the cost you pay each month for health insurance coverage.It’s different than a copay—a small fee that you may need to pay at each healthcare visit—or a deductible—the amount you have to spend on care before health insurance kicks in for the year.
Why Are ACA Premiums Increasing?Out of 324 insurer filings, 50 proposed decreasing premiums, but 85 requested premium increases higher than 10%, according to the KFF analysis. Higher prescription costs—including the costs of hugely popular obesity drugs like Wegovy and Zepbound—are partially to blame for rising insurance prices, according to KFF.
Excellus Health Plan, Inc. (New York)Every year more and more highly complex specialty medications are approved by the FDA to treat both rare and sometimes more common diseases. Specialty medications are used by approximately 2% of our members, but they account for more than 50% of total drug spend.
Factors like hospital market consolidation, labor shortages, and the cost of hospital care are also driving insurers to require higher premiums. Inflation plays a role, too.“It’s always important to keep in mind that individual insurers may be affected by specific factors, trends, and developments in their state or regional markets,” said Cori Uccello, a senior health fellow at the American Academy of Actuaries, which reviewed the proposed rate increases.How Can You Reduce Your Monthly Health Insurance Premiums?Depending on your income level, help is available to cover health insurance premiums.People earning at least 100% of the federal poverty level may qualify for a premium tax credit (PTC). This credit can either reduce your monthly premiums throughout the year or lower the taxes you owe when you file.If your individual income is at least $15,060 for 2024, you’re likely eligible for this tax credit. If you earn less, you may qualify for Medicaid, which does not charge premiums, deductibles, or copayments.The ACA policy you select determines how much money you can save with a PTC. There are four ACA tiers: bronze, silver, gold, and platinum. If you choose a lower-tier plan, you could pay nothing in premiums at all. If you choose a more expansive plan, you can use your PTC to lower the premium cost. Ultimately, premium costs also vary by where you live, how old you are, how many other people are on your plan, and whether you smoke. To find out your exact costs for 2025, enter your personal details on the Healthcare.gov website once the ACA marketplace’s 2025 open enrollment begins on November 1.Are Other Types of Insurance Increasing Premium Rates, Too?Medicare is expected to announce its 2025 rate increases on October 1. Employer-sponsored health insurance plans typically offer information about benefits for the upcoming year—including premium increases—around the same time.
What This Means For YouThe ACA marketplace enrollment for 2025 starts on November 1. The marketplace website, called Healthcare.gov, will have links and phone numbers for health insurance “navigators,” who can help you find the best health insurance options. You will not be charged for help by navigators that you find through the website.
Read the original article on Verywell Health.
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