Obamacare Continues to Send Premiums Soaring

Most Americans have seen increasing premiums and less coverage under Obama’s healthcare overhaul. Now, Texas’s biggest health insurer has asked to raise its rates by 60% – a sure sign that the Affordable Care Act has done nothing to make healthcare more affordable. 

Citing financial losses under the ACA, many insurers are demanding they be allowed to increase their premiums for 2017, hoping it will make up for sicker-than-expected members and lower-than-hoped-for enrollment. 

The cost of health insurance varies wildly from state to state, even from town to town, so the national picture will take many weeks to complete. Even so, current data shows that premiums are likely to increase in 2017.

North Carolina’s biggest insurer has announced it will be pursuing an average increase of nearly 19%. 

After an analysis of 9 states, consulting firm Avalere Health reports that premium increases for 2017 range from 5% in the state of Washington to 44% in Vermont. 

Government subsidies will shield millions of Americans from these drastic price hikes, but what about those who don’t quality for income-based subsidies? This demographic includes business owners, recent retirees, and the self-employed. Under the ACA, most Americans are required to buy health insurance to avoid fines at tax time.  

Blue Cross Blue Shield is available in every single county in Texas. The insurance giant has more than 600,000 policyholders in the Lone Star State, and has announced that it will be seeking increases between 57% and 59% for individual market plans. This demand is based on science, data, and strong financial principles, says Blue Cross. “It’s also important to understand the magnitude of the losses…experienced in the individual retail market over the past two years,” reads an official statement. 

Those losses totaled $416 million in 2014 and $592 million in 2015.

In addition to Florida and California, Texas is one of Blue Cross’s three largest markets. The Texas Insurance Department has refused to comment on the insurer’s “confidential” request, but spokesman Ben Gonzalez did say that the state could refuse approval if the request doesn’t meet Texas law requirements.  

The burden of these potential increases will fall primarily on rural communities where Blue Cross is the only option, says Wichita Falls insurance broker Kelly Fristoe. “This is going to be a very big disruptor of the market.” Healthier individuals will probably “be willing to roll the dice and take their chances” by rejecting coverage in favor of fines. 

State regulators can request more information from Blue Cross, but the federal government can’t make the insurer to roll back on its increases, says healthcare law expert Larry Levitt. “Given how much money (the company) lost, it’s likely that a substantial rate increase is merited.”

Of course, the Obama Administration shrugs off these concerns as premature and exaggerated. The Helath and Human Services Department maintains that Blue Cross’s request is just the beginning of a larger process. Texas consumers will have the option to switch providers when sign-up season starts in November. “Consumers will have the final word when they vote with their feet during open enrollment,” reads an official HHS statement. 

Blue Cross’s decision brings to mind another big premium price hike from a single health insurance company. Back in 2010, when Obama’s ACA legislation appeared to be stalled in Congress, WellPoint (now Anthem) announced a 39% increase for its California customers. The announcement galvanized Congress into action and Obama signed the landmark legislation just a few weeks later. 

Anthem is now America’s second-largest insurer. It is currently seeking to increase premiums by 20% – 41% for coverage under the ACA.