April 9 2014
Patrice J. Lee
The White House may have declared victory by hitting with its claims of having reached its initial enrollment target last week, but this is just the start of the misery ObamaCare is likely to cause us. Americans are beginning to feel the pain in their pocketbooks, and it will only get worse.
A new survey of healthcare brokers which sell plans in the individual and small group market finds the highest acceleration in rates recently than in any of the 12 prior quarters. Analysts contribute the rate spikes to a combination of factors driven by ObamaCare. The average increases are more than 11 percent in the small group market and 12 percent in the individual market. States show whopping increases from 10 to 50 times those increases.
We all knew this was coming including the Administration. HHS Secretary Kathleen Sebelius admitted that premiums would rise in the future. This study confirms that higher costs aren’t just coming, but they’re here.
The analysts conducting the survey attribute the rate increases largely to a combination of four factors set in motion by Obamacare: Commercial underwriting restrictions, the age bands that don’t allow insurers to vary premiums between young and old beneficiaries based on the actual costs of providing the coverage, the new excise taxes being levied on insurance plans, and new benefit designs.
The prior survey conducted in January also showed rates rising during the fall of 2013, but the new increases will come on top of those hikes and are even sharper. That prior survey of 131 brokers found that December 2013 rates were rising in excess of 6% in the small group market, and 9% in the individual market.
For the individual insurance market (plans sold directly to consumers); among the ten states seeing some of the sharpest average increases are: Delaware at 100%, New Hampshire 90%, Indiana 54%, California 53%, Connecticut 45%, Michigan 36%, Florida 37%, Georgia 29%, Kentucky 29%, and Pennsylvania 28%.
For the small group market, among the ten states seeing the biggest increases are: Washington 588%, Pennsylvania 66%, California 37%, Indiana 34%, Kentucky 30%, Colorado 29%, Michigan 27%, Maryland 25%, Missouri 25%, and Nevada 23%.
Is this surprising? Absolutely not. Tampering with the insurance market to require new provisions of services and levy new taxes was bound to boost the cost of business. Insurers have passed along those costs to customers. Any elementary understanding of business would’ve predicted this would happen.
As we’ve underscored before, the critical flaws with ObamaCare are not the rollout, PR strategy, or broken websites, but the law itself. The Affordable Care Act is anything but affordable and the changes it set in motion are causing harmful rippling impacts across the entire health sector. Even those who do not purchase a plan through the federal and state exchanges are and will be impacted through higher costs and other changes to their plans. And don’t forget the millions of Americans who lost their healthcare coverage because of ObamaCare.
ObamaCare is not a done deal, it’s a bad deal. We won’t stop hammering home this point, because the stakes are too high.