ObamaCare’s impact on health costs.
- 15% of Americans say healthcare costs are family’s top financial concern
- Those without money to live comfortably concerned with immediate living costs
- About one in 10 Americans say their family faces no financial problems
The last thing Democrats want to contend with just a week before the 2016 presidential election is an outcry over double-digit insurance hikes as millions of Americans begin signing up for Obamacare. But that looks increasingly likely as health plans socked by Obamacare losses look to regain their financial footing by raising rates.
Just a week after the nation’s largest insurer, UnitedHealth Group, pulled out of most Obamacare exchanges because it anticipates $650 million in losses this year, Aetna’s CEO said Thursday that his company expects to break even, but legislative fixes are needed to make the marketplace sustainable.
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Expect insurers to seek significant premium increases under President Barack Obama’s health care law, in a wave of state-level requests rippling across the country ahead of the political conventions this summer.
Insurers say the law’s coverage has been a financial drain for many of them, and they’re setting the stage for 2017 hikes that in some cases could reach well into the double digits.
For example in Virginia, a state that reports early, nine insurers returning to the HealthCare.gov marketplace are seeking average premium increases that range from 9.4 percent to 37.1 percent.
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UnitedHealthcare’s decision to quit insurance exchanges in about 30 states next year has patient advocates concerned that fewer options could force consumers to pay more for coverage and have a smaller choice of network providers.
The company’s departure could be felt most acutely in several counties in Florida, Oklahoma, Kansas, North Carolina, Alabama and Tennessee that could be left with only one insurer, according to an analysis by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)
To sell policies next year on the health law’s exchanges, also called marketplaces, insurers must apply within the next few weeks and get state approval this summer.
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Health insurance companies are laying the groundwork for substantial increases in ObamaCare premiums, opening up a line of attack for Republicans in a presidential election year.
Many insurers have been losing money on the ObamaCare marketplaces, in part because they set their premiums too low when the plans started in 2014. The companies are now expected to seek substantial price increases.
“There are absolutely some carriers that are going to have to come in with some pretty significant price hikes to make up for the underpricing that they did before,” said Sabrina Corlette, a professor at Georgetown University’s Center on Health Insurance Reforms, while noting that the final picture remains unclear.
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The Obama administration has published rules that “will make it impossible to offer HSA-qualified plans in the future” in the ACA exchanges, according to HSA expert Roy Ramthun. That’s because plans offered in the exchanges must comply with HSA and new ACA rules that conflict. This is one more way in which the ACA is limiting options to people getting coverage through the Obamacare exchanges, giving enrollees fewer of the options available to those with private and employer coverage outside the exchanges. Nationwide, nearly 20 million people were enrolled in HSA-qualified plans last year.
Many health-insurance premiums rose again this year, sometimes by double digits. A lot of the increases were accompanied by higher deductibles as well. Insurers say the increases are justified because their costs have risen as more people with health problems have signed up for insurance in the wake of the Affordable Care Act.
Some policy experts see the higher out-of-pocket costs as a positive development. When patients have a bigger stake in the cost of their care, the argument goes, they can drive prices down by spurning providers and services that are overpriced and inefficient.
Others argue, however, that it’s unfair to put the responsibility for reducing health costs on patients—particularly those with lower incomes, for whom quality health care is increasingly out of reach.
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Amid rising drug and health care costs and roiling market dynamics, the spokesperson for the nation’s health insurers is predicting substantial increases next year in ObamaCare premiums and related costs.
Without venturing a specific percentage increase, Marilyn Tavenner, the president and CEO of America’s Health Insurance Plans, said in an interview with Morning Consult that the culmination of market shifts and rising health care costs will force stark increases in health insurance rates in the coming year.
The warning to consumers from Tavenner, the former administration official who headed the Center for Medicare and Medicaid Services and oversaw the disastrous launch of HealthCare.gov, the ObamaCare website, comes at a time of growing uncertainty about the evolving makeup of the ObamaCare health insurance market.
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In January, CMS proposed overhauling the way it evaluates if and how much money ACOs are saving in the Medicare Shared Savings Program (MSSP). Under the revised methodology, the agency would adjust cost benchmarks based on regional rather than national spending data when an ACO signs up for a second three-year contract period.
Of 434 ACOs participating in the program, only 22 have chosen to participate in tracks that include downside risk.
Despite the extraordinarily large growth in Medicaid spending and the evidence that much of that spending is of low value to enrollees, the president is requesting more than $100 billion in additional Medicaid spending over the next decade.