Insurers are making final decisions about their Obamacare rates for next year. So far, it looks as if many of them will be building in an uncertainty tax.
The Kaiser Family Foundation has compiled proposed insurance prices for coverage in 21 large American cities next year. The rates remain subject to change as insurers and regulators continue to negotiate. But the Kaiser researchers have done similar analyses over the last few years and found the proposed rates to be roughly predictive of the national trend.
Two themes stick out: One is that, while insurance premiums will rise substantially in many cities, the increases are generally not bigger than they were last year. The other is that insurers are being quite explicit about citing the Trump administration’s hostile policy messages as a substantial reason for the higher prices.
Another year of big premium increases and dwindling choice is looking like a distinct possibility for many consumers who buy their own health insurance — but why, and who’s to blame?
President Donald Trump has seized on early market rumbles as validation of his claim that “Obamacare” is a disaster, collapsing of its own weight. Democrats, meanwhile, accuse Trump of “sabotage” on a program he’s dissed and wants to dismantle.
The Obama administration on Tuesday released a wide-ranging, positive report card on the Affordable Care Act, describing how Obamacare has driven down the rate of people without health insurance “to its lowest level in history,” increased financial security and access for consumers who seek medical care, and bent the cost-curve of health-care spending.
The Council of Economic Advisers report also argues that the big price hikes in Obamacare premiums for plans that go into effect in 2017 “are a one-time pricing correction, not a harbinger of future market instability,” and that the premium increases next year do not threaten the overall stability of the individual health-plan market.
Forget for a moment that President Barack Obama is set to leave office in just over seven months and that his program could be subject to change once a new president is in the Oval Office, because there’s a much more immediate problem to contend with: rate requests.
Fresh problems for Obamacare: Texas’ largest health insurer wants to raise its individual policy rates by an average of nearly 60 percent, a new sign that President Barack Obama’s overhaul hasn’t solved the problem of price spikes.
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.
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.
More from noted single payer healthcare critic Sally Pipes, President of the Pacific Research Institute. According to her new report in Forbes (online, May 4) the current view of the Obama administration when it comes to contemporary healthcare expenditures simply is “it could have been worse.” Pipes’ articles refers to an increase of “over 12 percent” – – since the Affordable Care Act became law in 2010. Under the Affordable Care Act (ACA) premiums for both individuals and families have soared. And, at the end of the day, “That’s a far cry from President Obama’s repeated 2008 campaign promise that Obamacare would “lower premiums by up to $2,500 for a typical family,” says Pipes.
Pipes Forbes account also says “Plans with higher deductibles already dominate in many states. In Indiana, which uses the federally operated Healthcare.gov exchange, 24 of the 29 plans available have high deductibles – – defined as at least $1,300 for individuals and $2,600 for families. In South Dakota, 31 of 38 plans do.”
Pipes adds, “Instead Obamacare has made health costs worse – – much worse. It’s pushed both deductibles and premiums though the roof. As a result, millions of consumers have been forced to buy overpriced insurance – and yet still have to empty their wallets when they visit the doctor’s office.”
Does the Affordable Care Act (“Obamacare”) live up to its name? Does it make health insurance less expensive? In November 2013, a team at the Manhattan Institute published a study indicating that Obamacare had increased the underlying cost of individually-purchased health insurance in the average state by 41 percent in 2014, relative to 2013. They have now redone the study on a county-by-county basis.
Employers cite Obamcare-related costs as part of the reason they are pulling back on heathcare insurance benefits.
Although President Obama said in spring 2013 that little would change for the 85% to 90% of Americans who already have healcare insurance coverage, only that “their insurance is stronger, better, more secure than it was before,” that does not appear to be the case at a growing number of companies. United Parcel Service (UPS, Fortune 500) told employees that health reform is contributing a 4% increase to the cost of coverage for 2014, while health care inflation adds another 7.25%. And Delta Air Lines (DAL, Fortune 500) said that Obamacare and inflation would increase costs by $100 million, though it only identifies $38 million as due to health reform.
Major Obamacare fees and taxes that employers say will raise their costs: The transitional reinsurance fee, the Patient Centered Outcomes Research Institute fee, the health insurer fee, the ‘Cadillac’ tax, and the individual mandate. Aside from these items boosting health insurance costs for employers, experts point out that companies have been shifting more of the burden to workers for years.