The ongoing dysfunction of the so-called Affordable Care Act is bad enough. But the impending collapse of the exchanges it offers is driving the push for an even larger government influence on healthcare. Insurers are responding by sprinting for the life boats.
UnitedHealth now only sells its health plans in three states. Humana left several markets behind after posting a 46 percent drop in revenue. Premera Blue Cross is leaving Oregon and twelve counties in Washington State.
Those insurers that are still clinging to the exchanges are now demanding double-digit premium increases. Marilyn Tavenner, a former Medicare and Medicaid Services chief recently said premiums next year are likely to be significantly higher than they have been in 2016.
UnitedHealth wants to hike up premiums for its New York plans by 45.5 percent. The median rate-hike request for New York next year is over 17 percent.
Humana has asked for a 51 percent increase for its supposedly “low-cost” silver plan in the metro area of Detroit. If it is approved, a 40-year-old who earns $35,000 would be expected to pay nearly $5,000 a year just to pay their premiums. And that figure still doesn’t even account for the substantial deductibles they must pay.
All but one remaining insurer have submitted requests for double-digit premium hikes in Oregon. Humana requested a hike of 65.3 percent in Georgia. If Highmark’s increased fees are approved in Pennsylvania, their customers will pay 38.2 percent more than they do now.
The damage report goes on and on.
Insurers have lost so much revenue on the Affordable Care Act exchanges so far that state regulators are almost certain to honor these rate hike requests. If they don’t, the insurers are likely to abandon the program.
Premiums are expected to spike by 25 percent in 2017 for plans purchased from HealthCare.gov, according to a new report from the White House.
Even with the spectacular additions for the benchmark plans, over 72 percent of Americans who receive health insurance through the ACA can find plans for under $75 per month. Approximately 77 percent can purchase plans for less than $100 per month.
These figures, based on an analysis of recently published prices for the approaching open enrollment period beginning on Nov. 1, rely on premium tax credits available under a 2010 health law, which 85 percent of those on the exchanges have access to now. Similar proportions of buyers had similar options in 2015.
The report highlights challenges the law has faced recently, and the number of challenges consumers will face. This 25 percent increase underlies areas where premiums will spike by over 50 percent. Many large insurance companies are withdrawing from marketplaces because of substantial financial losses and diminishing consumer freedom.
“Even in parts of the country that have high rate increases, consumers will still be protected,” said Katie Martin- Health and Human Services chief. “As the investigation shows, the ACA was built to accommodate price-sensitive consumers. The chances are in your favor that you will be able to find plans that are more affordable than the debate about the ACA may lead you to believe.”
The report supports a standard administration talking point: that because subsidies rise as premiums do under the health care law, coverage will still be affordable in spite of the hikes. The fact is, the proportion of people who are eligible for the subsidies will increase because eligibility is connected to the monthly premiums.
The Obama administration hopes to sign 13.8 million people up in the coming enrollment period- a figure that would be an increase from the 12.7 million who signed up last year.
The assistant secretary of public affairs for HHS, Kevin Griffis said that these premium increases are higher than those of years past. In 2015, an independent analysis showed there was an average premium increase of approximately 12 percent just before the open enrollment period started.
Griffis said that this year’s increase may be attributable to factors such as issuers bringing rates into concert with recorded costs, the expiration of the health law’s programs to stabilize premiums, and the limits placed on those programs by policymakers. They also compared the 25 percent jump for benchmark plans with the average increase for similar plans, which are expected to be 16 percent.
But it defies logic to try to correct this predictable failure of government healthcare by applying these kinds of “fixes” which only give the federal government greater control over your healthcare.
Regards,
Ethan Warrick
Editor
Wealth Authority
