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Obamacare Rate Hike Happens November 1: Are You Ready?

If you’ve already spent a significant amount of money on healthcare expenses this year or are paying a few hundred dollars a month for an Obamacare plan, be forewarned: Obamacare rates are going up November 1, just one week before the 2016 presidential election.

Millions of Americans are currently paying anywhere from $257 to $900+ in monthly premiums for a Bronze, Silver, or Gold Obamacare plan to avoid paying the ACA tax penalty — the penalty imposed upon everyone without a qualifying healthcare plan. Premiums already rose 9 percent in 2016 and thanks to the rate hike happening on November 1, are expected to soar in 2017.

Here’s a closer look at the Obamacare rate hike and what you can do to prepare for rising healthcare costs:

Why Obamacare Rates Are Going Up

Shifts in the insurance industry and rising health care costs are the driving factors behind the upcoming rate hike, according to the president and CEO of America’s Health Insurance Plans, Marilyn Tavenner, who shared some insights in an interview with Morning Consult. She predicts Obamacare premiums will increase dramatically in 2017 because there is so much uncertainty about the Obamacare health insurance market.

Some of the biggest insurance companies in the United States are pulling out of the Obamacare marketplace because it’s simply not profitable to participate. In fact, almost half of the 23 Obamacare insurance co-ops have already dropped out of the exchange. Just recently, UnitedHealth Group Inc. disclosed they will be dropping out of markets in at least 16 states because, as CEO Stephen Hemsley told investors, “The exchange market is proving to be smaller and riskier than UnitedHealth expected.” (Source: Bloomberg)

closeup of prescription pills on hundred dollar bills

How to Handle Increasing Healthcare Costs

If you’re one of the many Americans diligently paying your monthly Obamacare premium, 2017 rates may be higher and out of pocket costs will put even more of a strain on your budget. Now is a great time to rework your budget and consider other options. If health insurance premiums have simply become unaffordable for you, you could elect to go without an ACA-approved plan and pay for all your health and medical costs out of pocket. Many doctors now offer concierge care programs where you pay an annual fee for a set amount of doctor visits and get a discount on treatments.

doctor speaks to patient about Obamacare rate hikes

If you’re more concerned about covering costs of an emergency, such as an accident or being diagnosed with a chronic illness, consider Medical Cash Benefits. These are guaranteed issue plans - no medical exam required - where you pay a monthly fee for a guaranteed cash benefit in the event you become ill or end up in the hospital.

Another option: Short Term Medical Insurance. This will cover basic costs just like your regular health insurance plan at a fraction of the cost of your Obamacare premium. A medical exam may be required and you may need to pay for certain health care expenses on your own.

Keep in mind these plans and options are not ACA-eligible so you'll still be responsible for paying the ACA tax penalty — 2.5 percent of your adjusted gross income or $695 per adult and $347.50 per child under 18 in 2016, whichever is higher — if you're not adequately insured. Still, these plans can provide you with some peace of mind knowing that in the event of a medical emergency, you may be covered financially.

The Obamacare rate hike goes into effect November 1 which means your healthcare expenses could be significantly higher in 2017. Make sure you’re prepared by budgeting for the upcoming increases and are exploring alternative options to traditional health care plans.

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