Tags: Obamacare | rate | shock | health

LA Times: Regulators Concerned About Obamacare ‘Rate Shock’

Thursday, 21 Feb 2013 10:37 AM

By John Morgan

Bureaucrats and some consumer advocacy groups are worried about the likelihood of health insurance premium rate shock during the shift to Obamacare.

Officials in states that support the planned new health exchange marketplaces are warning that some Americans, particularly those who are young and do not receive coverage at work, might see much higher insurance prices than expected, the Los Angeles Times reported.

That scenario could mean young, healthy people may choose not to get health insurance and would instead pay the federal penalty for not having coverage. If that happens, it would leave an older, sicker demographic in the insurance pool, likely resulting in even higher premiums, according to the Times.

Editor's Note: Make 2013 the Year You Pay Zero Taxes

Regulators in California, Oregon, Rhode Island and other states have asked the Obama administration to slow the implementation of the Affordable Care Act.

“It’s not an issue of whether we should get there. We should,” Oregon Insurance Commissioner Lou Savage told the Times. “We just want to make sure healthy people don’t leave the market.”

Regulators in Massachusetts predicted that while some residents and small businesses “will see premium decreases next year, a significant number will see extreme premium increases.”

The law places limits on how much insurers can charge older Americans, and bans them from charging more to women or those who are ill.

And while the law prevents insurers from charging older Americans more than three times what they charge younger Americans, some observers worry the insurers will raise rates for younger ones to make up lost ground.

The health exchanges are due to launch nationwide on Oct. 1.

The health insurance industry has commenced an “all-out, last-ditch effort” to deflect the blame for looming rate increases on their policies, according to The Washington Post.

Insurers maintain their costs will increase because they will be barred from rejecting the sick, will have stricter limits on what they charge older Americans and will have to offer more comprehensive coverage in many cases.

Aetna CEO Mark Bertolini predicted Obamacare would result in consumer premiums that will be 50 percent higher on average.

Not everyone believes the industry resistance is well-founded.

“‘Rate shock’ is the new ‘death panels,’” Wendell Potter, a former head of communications for Cigna, told The Post. “They’ve chosen these words very carefully to scare people. It’s the ideal term for what is, at its core, a fear-based campaign.”

The nonpartisan Congressional Budget Office predicted insurance premiums for those who buy individual coverage in the exchanges would be 10 percent to 13 percent higher in 2016, the Times reported.

Editor's Note: Make 2013 the Year You Pay Zero Taxes

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