But volatile markets with large rate increases were, if anything, more common before Obamacare. An adjustment period to the new law was inevitable. And McKinsey’s findings echo what a broad, if not quite unanimous, chorus of insurance industry officials and experts have been saying for a while — that while premiums are likely to keep bouncing around, with carriers entering and exiting the market, the new system is likely to endure in the long run.
The main reason for this confidence is the law’s tax credits, which discount premiums by hundreds or sometimes thousands of dollars a year. They insulate the majority of consumers from rising premiums and are likely to keep enrollment from dwindling to the point where insurers must constantly raise premiums to cover their losses.
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