President Obama assured us that the Affordable Care Act would make health insurance better and more affordable for American citizens. But the controversial healthcare overhaul has done the exact opposite – and it’s getting worse.
“There were a lot of stories in the newspaper, just like there are this year, about, oh premiums are skyrocketing and this is going to be terrible and all that,” said President Obama about the 2014 process. “When all the dust is settled and the commissioners who were empowered to review these rates forced insurance companies to justify what they were seeking, what you discovered was, is that the rates actually didn’t go up as much as people thought.”
But the dust hasn’t settled, and premiums are still rising.
As I wrote in June, many insurance companies are demanding they be allowed to increase their premiums in 2017 – simply because they can’t make money on Obamacare exchanges. Providers like Aetna and United have already dropped out of the marketplace, citing millions of dollars in losses. To prevent other companies from following suit, the US government has started jacking up prices again.
What this shows is that the insurance companies are really in control of the situation – not the government. This week, Tennessee Insurance Commissioner Julie Mix McPeak announced the approval of ObamaCare premium increases of 62%, 46%, and 44% for the state’s three major insurers. “I didn’t feel like I had any choice but to approve those rates when it came back to be actuarially justified,” admits McPeak, adding that her decision was influenced by the fear of more insurers dropping out of ACA exchanges.
“We’re certainly not at a place of collapse right now, but I am very worried that, like I mentioned, any one carrier deciding to withdraw from our marketplace could cause a disastrous effect, because the other insurers may follow suit,” says McPeak. “And at this point I don’t feel like we have a successful exchange because, like I said, half of our counties have only one option on the exchange today and so having any change in the level of competition may not allow our exchange to survive.”
Unfortunately, this isn’t just a Tennessee problem. Al Redmer, Insurance Commissioner of Maryland, predicts “significant increases in the individual market” for his state. Wayne Goodwin, Insurance Commissioner of North Carolina, worries that some areas of his state may end up with no ACA options at all. Blue Cross Blue Shield of NC is still deciding whether or not to continue offering statewide coverage in 2017.
“We haven’t heard from the Department of Insurance on rates,” says NC Blue Cross spokesman Lew Borman, and “all options [are] still on the table.” Blue Cross remains undecided in Tennessee as well, and McPeak says that it is “extremely concerning” that Blue Cross plans could drop out of some areas, in effect leaving some consumers with no options. Blue Cross plans to make a final decision in mid-September.
It is unclear how many states will be affected by these price hikes, but ObamaCare analysts predict an average premium increase of 27.6%. Government subsidies will protect most Americans from these rising costs, and the Department of Health and Human Services reports that 73% of consumers will still be able to find plans for less than $75 per month even if all premiums increase by 25%.
But what about the 15% of us who don’t qualify for ObamaCare subsidies? These unlucky individuals will have to bear the full cost of premium increases, and let’s not forget that a rise in subsides means an increase in government spending.
This pattern of price hikes shows no sign of stopping, and will no doubt become a serious topic in the 2016 presidential and congressional elections. Senator John McCain (R-AZ), who is up for reelection this year, says, “The crumbling of ObamaCare at this alarming rate is simply unsustainable.” It could leave the state of Arizona with “more expensive, less accessible health care.”