ObamaCare’s impact on health costs.
Some of the Affordable Care Act’s insurance marketplaces are in turmoil as the fourth open enrollment season approaches this fall, but what’s ahead for consumers very much depends on where they live.
Competition on these exchanges will be diminished next year when three of the nation’s largest health insurers — Aetna, UnitedHealthcare and Humana — will sell individual plans in many fewer markets. So too will several Blue Cross and Blue Shield plans in various states. That’s on top of the 16 nonprofit co-ops that have closed since January 2015.
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After last year’s 4% rate increase, California’s Obamacare insurance exchange rates appear to be catching up to the rest of the country.
The two biggest carriers are raising rates by much more than the average 13.2% increase. Blue Shield said its average increase was 19.9% and Anthem said it would increase rates an average of 17.2%
According to the LA Times, Covered California officials blamed the big increase on the “rising costs of medical care, including specialty drugs, and the end of the mechanism that held down rates for the first three years of Obamacare.”
Well, once again when it comes to Covered California’s explanations, not exactly.
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It is all about the price.
Millions of people buying insurance in the marketplaces created by the federal health care law have one feature in mind. It is not finding a favorite doctor, or even a trusted company. It is how much — or, more precisely, how little — they can pay in premiums each month.
And for many of them, especially those who are healthy, all the prices are too high.
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After the Affordable Care Act took effect in 2010, it created a review mechanism intended to prevent exorbitant increases in health insurance rates by shaming companies that sought them.
But this summer, insurers are turning that process on its head, using it to highlight the reasons they are losing money under the health care law and their case for raising premiums in 2017.
That has ignited an election-year fight between insurers and consumers, who are complaining bitterly about the double-digit increases being sought across the country.
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In an effort to prevent more insurers from abandoning the Obamacare exchange in Tennessee, the state’s insurance regulator is allowing health insurers refile 2017 rate requests by Aug. 12 after Cigna and Humana said their previously requested premium hikes were too low.
Cigna and Humana filed to increase last year’s premiums an average of 23 and 29 percent, respectively, on June 10. But in the interim, both insurance companies have told state regulators that the requests would not cover the expected claims, said Kevin Walters, spokesman for the Tennessee Department of Commerce and Insurance.
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Blue Cross Blue Shield of Alabama is seeking an average rate increase of 39 percent on individual plans offered through the Obamacare marketplace, according to the Centers for Medicare & Medicaid Services.
The proposed rate hikes will affect more than 160,000 people in Alabama who purchase insurance through the federal exchange, or about 5 percent of Blue Cross membership.
Rate increases range from 26 to 41 percent, depending on the type of plan. Proposed increases are lowest for bronze plans, which offer the least amount of coverage, and greatest for the most popular silver plans.
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Projected employer benefit costs are a stark contrast to the expected premium increases and out-of-pocket costs on the Obamacare exchanges next year. Employer-sponsored premium increases are expected to be about half of what has been proposed on individual exchanges for next year. Net deductibles are expected to be, on average, about one-third of those on exchange plans.
The difference could be explained in part by the relative age of the different marketplaces. While insurers are still adjusting to the relatively new Obamacare exchanges, the employer-based marketplace has many more years of experience to help keep costs stable. The employer market also likely has a better mix of sick and healthy people, helping keep costs down, on average.
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House Speaker Paul Ryan’s health care blueprint, released late last month as part of his “A Better Way” reform agenda, would deliver affordable, accessible health coverage at less cost and with less disruption to the health care market than Obamacare. Ryan’s plan would slash premiums by, among other things, getting rid of Obamacare’s costly essential-health-benefit mandates. People would be free to purchase low-cost plans that don’t cover procedures they don’t want or need. The plan would also make health coverage more affordable for middle class families by replacing Obamacare’s complicated scheme of subsidies with more straightforward, age-based, refundable tax credits.
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On Monday, Illinois citizens were jolted by a piercing pain in the wallet as federal officials unveiled proposed Obamacare insurance premium rates for 2017. Insurers plan to dial up rates as much as a heart-stopping 45 percent for those who buy plans on the Obamacare marketplace when open enrollment starts Nov. 1.
That means thousands of people will scramble for affordable insurance … and won’t find it.
Is this rate shock unforeseen? Not really. Rocketing Obamacare rate requests have become an annual rite of summer, as welcome as sunstroke.
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The latest rates for health insurance under Obamacare in New Hampshire range from a drop of less than a half-percent to nearly a 60 percent increase, depending on the insurer.
All insurers offering health plans in the exchange had to present their proposals by Monday for the year beginning Jan. 1.
The dominant health insurer, Anthem, had the lowest proposal — a decrease of four-tenths of 1 percent from the preferred provider organization for the “off exchange” population.
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