Health Reform: So much for the “affordable” part of the Affordable Care Act. Looks like ObamaCare premiums will rocket next year while sky-high deductibles make it too costly for many to see the doctor.
Last Monday, IBD’s Jed Graham broke the news that big insurers in six states “are seeking to raise rates an average 18.6% next year.”
BlueCross BlueShield of Tennessee — which currently accounts for 70% of the ObamaCare enrollees in that state — is looking to increase premiums a whopping 36.3%.
CareFirst — which has 80% of the ObamaCare enrollees in Maryland — is pushing for a 30% increase.
Oregon’s Moda Health wants a 25.6% increase, on average, for the roughly half of ObamaCare enrollees it covers in the state.
The Wall Street Journal followed up on Graham’s reporting later in the week, noting that New Mexico’s market leader, Health Care Service, wants an average 51.6% boost in premiums.
A couple of reasons for these huge spikes:
First, insurers now have claims experience on which to base premiums, and what these market leaders are finding is that enrollees are older, sicker and more expensive to cover than they’d anticipated.
Second, federal bailout programs meant to cushion insurance industry profits in ObamaCare’s first couple years are starting to end. This is part of the reason the Congressional Budget Office predicts ObamaCare premiums will climb 8.5% next year.
Then there’s this — namely, a market distortion created by ObamaCare’s premium subsidies. These big insurers know that most consumers won’t even notice these higher premiums, because ObamaCare caps what they have to pay as a share of income.
Taxpayers, however, will notice when they are forced to cough up larger subsidy payments. So, too, will anyone who is ineligible for ObamaCare’s subsidies because their incomes are above 400% of the poverty line.
To be sure, some of the proposed premium increases are relatively small, and state insurance commissioners will no doubt try to push down the double-digit hikes before they go into effect. But as Graham notes, because these latest premiums are based on ObamaCare claims data, regulators may not be able to push them down much.
Things aren’t looking much better for ObamaCare enrollees at the other end of the spectrum, where even high-cost plans can come with substantial deductibles.
Families USA, a strong backer of ObamaCare, finds that a quarter of those in the individual market went without some needed care “because they could not afford the cost.” That includes follow-up treatments, prescription drugs and primary care visits.
That’s because, while ObamaCare promised access to insurance, it didn’t promise access to health care. So to keep premiums down in the midst of ObamaCare’s expensive benefit mandates and market regulations, insurers jacked up deductibles.
Families USA says 43% of those buying through an ObamaCare exchange had deductibles of $1,500 per person. Nearly a quarter had deductibles double that amount. And that’s despite the fact that many lower-income ObamaCare enrollees are eligible for cost sharing, which can reduce the deductibles and co-pays they’d otherwise face down to zero.
Naturally, Families USA’s answer to this cost problem is to push for still more government intervention into the insurance market — in this case, it wants to force insurers to lower their deductibles.
But this would only lead to still bigger ObamaCare premium hikes. They might not be of any concern to liberal advocacy groups, but they should be a major problem for taxpayers forced to pick up the tab of the increased subsidy costs.
Backers of ObamaCare promised it would make health care more affordable. For many, it’s delivering the opposite. Prescribing even bigger doses of the same poison won’t cure anything.
