May 19 2014
Patrice J. Lee
We’ve been predicting that costs for healthcare would rise for those with ObamaCare and unfortunately for those without it as well.
New numbers posted online for 2015 indicate that those with ObamaCare will face notable increases in premiums for 2015. The two states reporting early proposed rate increases are Virginia and Washington. Washingtonians can expect an average rate increase of 9.6 percent and those who love Virginia probably won’t love the 11.7 percent spike.
Washington State’s average premium increase across all of its Obamacare plans is 6.4%. But the state is one of a handful that report exchange enrollment by plan. So the more meaningful statistic is the enrollment weighted average increase, since this measures the real impact on consumers. And that figure is 9.6%.
The health plan Centene, for example, which has enrolled 17% of consumers entering the Washington State exchange, is raising its 2015 rates by 11.2%. This puts the health plan toward the high end of the range. In Washington State, most of the plans offering products next year are the same insurers in the market this year. In all, there are only four new entrants in the state’s exchange market for 2015.
In Virginia, the highest premium hike is courtesy of Humana, which is proposing to raise its premiums by 22.4% next year. Wellpoint is seeking an increase of 8.5%. Aetna, which also participates in the state’s exchange, hasn’t posted its rates yet. Only two new plans will be entering the Virginia market next year.
What’s at work behind these increases? Insurers now see that the composition of enrollees is riskier than expected. The administration failed to lure young, healthy people into ObamaCare to offset the costs and risks of older and sicker Americans. As we’ve explained, 39 percent of enrollees need to be in the 19-34 age range. At last check, it was only about 28 percent, therefore, the pools are riskier and will be reflected in the premium price rises.
The Fiscal Times examined what we can expect for the future and predicts that the group market where most Americans get their healthcare coverage faces more problems:
Shortly after the passage of the Affordable Care Act, the Department of Health and Human Services produced an analysis that predicted the employer mandates and increased costs would force “66 percent of small employer plans and 45 percent of large employer plans” to be canceled. That was the “mid-range” estimate, one that went unnoticed until the mass cancellations of plans in the individual market.
The White House has been attempting to avoid its consequences ever since. They have delayed the implementation of the employer mandate for businesses with fewer than 200 employees until 2016, and pushed open enrollment this fall for 2015 until mid-November – well after the midterm elections.
However, the steep price increases coming in this market already have businesses looking at bailing out of health coverage for their employees, NPR reported this week, with the impossibly sunny spin that employers had begun considering plans to “give workers a chunk of cash” to get pushed into the individual markets.
Another NPR report this week got much closer to the truth of why businesses want to get out of health insurance coverage. Sarah Jane Tribble profiled AmeriMark, a catalog retailer with 700 employees that has long provided coverage for employees. However, the premiums for their 2013 plans escalated 30 percent for 2014, so they switched carriers and forced employees to pay a higher share of premiums with higher deductibles and co-pays.
Businesses will have to react to dramatic price increases, either by passing them onto the employees and eating into their wages or by passing them along to the consumer. When insurers start making their new prices public, the resulting market churn will make this past fall look like a mere frolic.
If the President thought last fall with the woeful ObamaCare rollout and cancelled plans was a headache, he and his Obamacare supporters –especially those in Congress- will face migraines in the middle of heated midterm elections.
The timing couldn’t be worse for those trying to hold on to their seats, but it couldn’t be better for the majority of Americans who disapprove of ObamaCare to secure direct accountability from those who voted to establish the President’s signature legislative failure.
ObamaCare continues to be a bad deal for (young) Americans and they are seeing just what they looks like each day.