Four years ago, when President Obama predicted that the Affordable Care Act would result in lower health-insurance premiums, we gave him Three Pinocchios. The “Obamacare” law had not been fully implemented yet, but we reviewed nearly 10 reports from states across the country on the potential impact of the law and concluded the law’s provisions “will almost certainly increase premiums, though tax subsidies will help mitigate the impact for a little over half of the people in the exchanges.”
As we noted then, you can’t get something for nothing.
Read more at The Washington Post
Premiums will go up sharply next year under President Barack Obama’s health care law, and many consumers will be down to just one insurer, the administration confirmed Monday. That will stoke another “Obamacare” controversy days before a presidential election.
Before taxpayer-provided subsidies, premiums for a midlevel benchmark plan will increase an average of 25 percent across the 39 states served by the federally run online market, according to a report from the Department of Health and Human Services. Some states will see much bigger jumps, others less.
Enrollment in the Obamacare insurance marketplace is likely to stall or even decline for 2017 as higher premiums drive away people who aren’t eligible for government subsidies, according to S&P Global Ratings forecasts.
“Our forecasted modest-to-negative growth is clearly a bump in the road, but doesn’t signal ‘game-over’ for the marketplace,” S&P analyst Deep Banerjee wrote in a report released Thursday.
Minnesota’s Democratic governor on Wednesday said Obamacare is “no longer affordable to increasing numbers of people” — the latest sign of Democrats’ growing concern about the law’s rising insurance costs.
Gov. Mark Dayton’s criticism comes as his state faces massive rate hikes and shrinking competition in its Obamacare insurance marketplace next year. Dayton’s comments also come almost a week after Donald Trump and Republicans seized on former president Bill Clinton’s remarks lamenting Obamacare’s affordability problems.
Obamacare may have come under fire for rising health insurance premiums, but plans offered by employers, which cover far more people, are rising even faster, a new report shows.
On average, premiums for “benchmark” plans offered on the state and federal government health insurance marketplaces are 10 percent lower than for the average employer-sponsored plan, the team at the Urban Institute found.
The promise of Obamacare was that it would foster competition and offer lower premiums while covering tens of millions of Americans without, as Obama often put it, adding a dime to the deficit.
Unfortunately, most of the exchanges are in serious trouble. As many critics pointed out at the time, the law is poorly designed to induce younger, healthier people to get into the system. The penalties attached to the individual mandate are too weak. The subsidies are too small. The premiums are too costly. The deductibles are too high. Many doctors aren’t participating in the networks.
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.
As insurers push large premium increases for 2017 Obamacare plans, some of the steepest hikes have been requested by insurers in crucial swing states that could determine control of the Senate.
In nine of 11 states with competitive Senate races, at least one insurer seeks to hike rates for Obamacare customers by at least 30 percent next year: Highmark Blue Cross Blue Shield in Pennsylvania wants to jack up average premiums by more than 40 percent. In Wisconsin, three insurers have asked for rate hikes of more than 30 percent. In New Hampshire, two of the five carriers want to sell plans with rate increase above 30 percent.
The potential sticker shock — coupled with the likelihood many consumers will have fewer choices next year after major insurers scale back their exchange participation — creates a potential political opening for Republican candidates, especially since the next Obamacare enrollment season starts one week before Election Day.
Joe Cortelli, a health insurance expert from the nationwide consulting group HIG, explains:
“We have done nothing to improve the outcomes of the 10% of the population that drives 80% of our claims costs. We have merely pumped billions of dollars into these [ObamaCare] exchanges masking the real problems. Unless the government can continue to pump money into these exchanges, the end result is not that hard to imagine. It is not a question of how, but when, this will all come home to roost.”
The facts support this. Millions of previously uninsurable sick people are flooding the insurance market, driving premiums sky high. As noted in the Fiscal Times, “The combination of market forces and limitations imposed by the [ACA] will put enormous pressure on insurers to up their premiums.” The pressure on insurers is undeniable, including the $650 million losses recently reported by UnitedHealth.
Investor’s Business Daily in an editorial says that the following predictions from Obamacare critics actually came true: Young people would opt to pay the penalty instead of getting insurance, premiums and medical claims would increase, people would wait until they got sick to buy insurance and cancel the plan after the bills were paid and insurers would leave Obamacare after they lost money.