Insurers Say Premium Prices Will Soar Next Year Because of Obamacare
Insurers on Obamacare: Expect Premium Prices to Soar
The Fiscal Times - Health insurance
premiums will likely skyrocket next year, despite the Obama
administration’s consistent assurance that consumers will not experience
sticker shock under the president’s health care law.
That’s according to industry insiders who told The Hill
that they are expecting the price of monthly premiums to increase
significantly. In some states, rates could increase by as much as 300
percent.
“There is extensive concern about rate increases next year,” said Avalere Health’s Vice President Caroline Pearson. “Particularly since early exchange enrollment is skewed toward older enrollees, some are concerned that plans will need to raise prices in 2015.”
Rates
won’t be announced until the fall, however, and Pearson cautioned that
it’s still too early to know what they are likely to be since the
enrollment period for this year is still ongoing.
The
industry’s concerns of rising premiums are largely out of step with
Health and Human Services Secretary Kathleen Sebelius’s comments at a
congressional hearing last week, where the secretary downplayed any
potential sticker shock.
“The increases are far less significant than what they were prior to the Affordable Care Act,” Sebelius said in testimony before the House Ways and Means Committee.
But
insurers say a combination of Obamacare’s new taxes and fees, as well
as rule changes and delays announced to cope with the rocky rollout,
will likely contribute to higher than expected rates.
For
instance, the administration’s decision to allow people to keep their
old policies likely means that fewer people than anticipated are
enrolling on the new exchanges.
This
is bad news for the Obama administration, which has routinely pointed
out that premiums on the exchanges are less expensive than comparable
employer-based policies. While premiums may be cheaper, out of pocket
costs on exchange plans tend to be higher. A survey by HealthPocket.com
found the deductibles on the exchange plans were 42 percent higher than
employer based policies. But now, insurers say Obamacare consumers can
expect to experience sticker shock from both premiums and deductibles.
Still,
administration officials as well as health policy experts say the
rising cost of premiums and deductibles were an issue even before the
law took effect.
“The bottom line is that we just don’t know. Premiums were rising 7 to 10 percent a year before the law. So the question is whether we will see a continuation of that sort of single digit increase, as Sebelius said, or whether it will be larger,” MIT professor and one of the architects of Obamacare, Jonathan Gruber told The Hill.
Insurers
say not everyone will see premiums rise significantly. That’s because
the rates vary depending on the region and carriers available in the
area.
For instance, counties
that have a population that skews older or have only one major hospital
system in the area will likely be hit with higher premiums. In contrast,
places with a mix of healthier younger people and more competition for
providers will likely see lower premiums.
Check out the worst places to live for Obamacare here.
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