Tags: Healthcare Reform | obamacare | healthcare | premiums | increase

Insurers Seeking Large Premium Hikes for Obamacare Plans

By    |   Saturday, 30 May 2015 02:42 PM

The nation's insurers are experiencing large increases in healthcare costs, and as a result, many want double-digit premium hikes that could make Affordable Care Act plans much less affordable for millions of Americans.

"Insurers seem to be reporting higher trend, which means they are seeing bigger increases in healthcare costs," said Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation, reports Politico.

"But really what’s going on here is they now have data showing what the risk pool looks like. Initially in 2014 they were completely guessing about who was going to enroll and how much healthcare they were going to use."

In New Mexico, Blue Cross Blue Shield has proposed a 50 percent premium increase for its Obamacare plans, but state officials may reject the request. However, insurance experts predict premiums will go up even more next year than they did during the initial two years after Obamacare coverage was approved.

This year alone, premiums went up by about 5.4 percent, according to the PwC Health Research Institute, Politico reports.

Obamacare is already facing trouble as it is, with a Supreme Court ruling in the King v. Burwell case pending over whether federal subsidies should be permitted on plans, and as a presidential race fires up with most Republican candidates agreeing with GOP lawmakers that the controversial law should be repealed.

Another deadline is looming, though: By Monday, insurers must publish and explain rate hikes of 10 percent or more, and there are a few insurers whose planned increases are in the double digits.

In Maryland and Tennessee, Blue Cross Blue Shield are seeking increases of more than 30 percent, and cover most of the exchange recipients in their states. In addition, Moda Health Plan, which covers more than 40 percent of recipients in Oregon, wants a 25 percent hike.

In addition to insurers knowing more about the health status and patterns of their customers, there are other reasons being cited for the raises, including rising drug prices and phasing out of ACA programs designed to reduce insurers' risks.

Also, the Obama administration allowed insurance plans that don't meet all Affordable Care Act requirements to stay in place through 2017, and insurers have been hit hard while competing with the outside plans.

Another problem is that many companies set their rates lower than they should have to begin with, gambling that customers would stay on the plans when the rates were brought back up, said Seth Chandler, an insurance law expert from the University of Houston and author of the ACA Death Spiral blog.

Their proposed increases are feeding lawmakers' wishes to repeal or repair Obamacare.

"People are paying more as a result of the Democrats’ healthcare law, and they’re going to be paying even more next year, and the year after that, until we’re able to do something to stop it," said Sen. John Barrasso, R-Wyo., chair of the Senate Republican Policy Committee, in a speech on Senate floor before the Memorial Day break. "Republicans are offering real solutions that will end these destructive and expensive Obamacare side effects."

Some states are allowing insurers to turn in two sets of rates, depending on how the Supreme Court rules in the subsidy case. However, most of the rate increases factor in the possibility that the subsidies could be outlawed.

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The nation's insurers are experiencing large increases in healthcare costs, and as a result, many want double-digit premium hikes that could make Affordable Care Act plans much less affordable for millions of Americans.
obamacare, healthcare, premiums, increase
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2015-42-30
Saturday, 30 May 2015 02:42 PM
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