ObamaCare’s impact on health costs.
In the last few years, even though premiums in the Affordable Care Act’s health insurance marketplaces were rising, most customers could avoid a big price rise by shopping for a cheaper plan.
Next year, according to a preliminary analysis, that is going to be a lot harder.
Even someone who shopped wisely this year and is willing to switch plans to get the best deal next year is looking at an average premium increase of 11 percent, according to an analysis of rate filings in 18 states and the District of Columbia provided by the McKinsey Center for U.S. Health System Reform.
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The Affordable Care Act enrollment period doesn’t begin until November, but the recent departure of several health insurance providers from federal and state marketplaces is raising concerns of fewer choices and higher premiums.
But federal officials emphasized that consumers will still have affordable coverage options during a Wednesday conference call. Even if insurance premiums increase by 25 percent, 60 percent of Indiana consumers would be able to purchase coverage for less than $75 per month, according to a report from the U.S. Department of Health and Human Services.
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State insurance officials say they are feeling pressure to approve large ObamaCare premium increases to prevent more insurers losing money from dropping out of the market altogether.
Tennessee’s insurance commissioner, Julie Mix McPeak, this week announced the approval of premium hikes of 62 percent, 46 percent and 44 percent, respectively, for the three insurers on the state’s marketplace.
She said her department’s actuaries had found the rate increases to be justified.
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With the fourth open-enrollment period set to begin this fall for the marketplaces set up by the Affordable Care Act, it’s becoming clear that the market for health insurance has not evolved as expected, or hoped.
The market is smaller than projected. The people who have bought health plans overall are sicker than predicted. And health insurers have incurred larger losses than anticipated.
As a result, some large national insurance companies, including UnitedHealthcare, Humana and Aetna, plan to abandon markets across the country next year. And health insurers in Wisconsin are proposing the largest rate increases yet for health plans sold on the online marketplaces throughout the state.
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Increasingly, U.S. consumers may have fewer insurance options under Obamacare.
The latest evidence comes in a study from consulting firm Avalere Health, which examined areas, known as rating regions, that insurers use to set premiums and decide where to offer plans to individuals under the Affordable Care Act.
According to Avalere, 36 percent of the approximately 500 rating regions in the U.S. may have just one health insurer when the 2017 signup season starts on Nov. 1. Another 19 percent could have just two carriers. There was far more competition this year, with about two-thirds of rating areas having three or more health insurers vying for customers’ business, according to Avalere.
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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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