After years of losses, the U.S. health insurance industry figured out how make money from Obamacare last year, a new analysis shows.
The secret? Raising their prices.
The average cost of health insurance plans sold in the individual market climbed about 22 percent in 2017, as insurers boosted premiums well above what they spent on medical care. That left many in a profitable position for the first time since the Affordable Care Act went into effect, according to a Kaiser Family Foundation report released Thursday.
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Oregon’s seven Obamacare insurers are asking for an average nearly 8 percent rate increase for 2019, with some plans calling for hikes of as much as 16 percent.
Of the seven insurers selling plans on the individual market and the law’s exchanges, six plan on raising rates next year between 5 percent and 16 percent. The other insurer aims to reduce rates by nearly 10 percent. Insurers that are proposing rate increases point to the repeal of Obamacare’s individual mandate penalty in 2019 as a reason.
The news comes as Democrats and Obamacare allies are attempting to tie the GOP to any rate increases because of changes the Trump administration and the Republican-controlled Congress have made to the law.
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New York and Minnesota officials have settled a lawsuit against the Trump administration over its decision to slash federal funding for the states’ health plan programs that cover certain low-income people.
A federal judge in the U.S. District Court for the Southern District of New York dismissed the case after the HHS agreed to pay $151.9 million to New York and $17.3 million to Minnesota by May 14 to fund the states’ Basic Health Programs, which together cover 800,000 people.
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Insurers are proposing double-digit premium increases in Maryland’s individual-health-plan market, a consequence of what the state’s health insurance commissioner called a “death spiral.”
CareFirst BlueCross BlueShield requested an 18.5 percent increase on the HMO plans used by the vast majority of its individual-plan members — and a whopping, 91.4 percent increase on its PPO plans. Kaiser Permanente requested a 37.4 percent increase on its HMO plans. The average rate increase requested, across insurers and plans, was 30 percent.
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The first glimpse of what health-insurance companies plan to charge for Obamacare plans next year suggests there’s no relief ahead for consumers saddled with high premiums.
Several insurers in Maryland and Virginia are seeking double-digit percentage increases in monthly costs for individual medical plans in 2019. The largest increases are being sought by CareFirst, which wants to nearly double the amount it charges on average for one coverage option in Maryland, and raise the cost of another in Virginia by 64 percent.
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Two of Virginia’s ObamaCare insurers are requesting significant premium hikes for 2019, according to initial filings released Friday.
Both Cigna and CareFirst BlueCross BlueShield cited policies advocated by the Trump administration, including the repeal of ObamaCare’s individual mandate, as part of its justifications for the increases.
Cigna is proposing an average premium increase of 15 percent for its 103,264 customers in Virginia, with a range of increases from 6.4 percent to 40 percent.
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Rep. Ami Bera (D-Calif.) is proposing to test automatically enrolling people in ObamaCare plans as a way to cut the uninsured rate.
Bera unveiled a bill that would give grants to states to set up pilot programs to automatically enroll eligible people in ObamaCare plans or Medicaid.
People would still have 60 days to opt-out if they wanted to, so they would not be forced to buy coverage, but Bera says the idea is that people are more likely to sign up if the default is to be signed up and they need to actively opt-out of coverage.
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There are already more than a dozen reasons people can use to avoid paying the penalty for not having health insurance. Now the federal government has added four more “hardship exemptions”. Under the new rules, people can apply for a hardship exemption that excuses them from having to have health insurance if they:
- Live in an area where there are no marketplace plans.
- Live in an area where there is just one insurer selling marketplace plans.
- Can’t find an affordable marketplace plan that doesn’t cover abortion.
- Experience “personal circumstances” that make it difficult for them to buy a marketplace plan, including not being able to find a plan in their area that gives them access to specialty care they need.
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Louisiana’s health insurance market for individuals has been plagued in recent years by insurers fleeing the market and double-digit rate increases — prompting a proposed fix that would tack a fee on policies across the state to create a safety net against insurers’ losses and hold the line on runaway premiums.
The state Department of Insurance is pushing a bill through the Legislature that it says would lower premiums in the individual market by an average of 15 percent next year. The bill would put a roughly $1.25-a-month fee on every health-insured life in the state. That money, which one critic labeled a tax on business disguised as a fee, would go into what is called a reinsurance pool designed to protect insurers against high-cost patients.
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The federal health insurance exchange allows people to enroll for insurance coverage outside of the annual open enrollment period under certain circumstances, such as losing coverage from an employer. Insurers are concerned that some people are misusing this flexibility by reenrolling after their coverage was terminated for nonpayment of premiums. Not only is this against the rules, but it undermines the stability of the exchange. CMS doesn’t collect complete data that would allow it to gauge the extent of the problem. GAO recommends gathering data on coverage terminations for nonpayment of premiums.
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