Philip Klein, author of Overcoming Obamacare: Three Approaches to Reversing the Government Takeover of Health Care and managing editor of the Washington Examiner, explains how recent rate hikes by insurance companies in numerous states underscore just how shaky the foundation of Obamacare is.
In recent weeks, large insurers selling coverage through Obamacare have proposed massive rate increases for 2016 – even exceeding 40 percent – because they haven’t been able to sign up enough young and healthy customers.
This is an ominous sign for the future of Obamacare, because two federal programs that were supposed to act as training wheels for insurers in the early years of Obamacare by absorbing excess risk are set to expire after 2016. If insurers don’t do a better job of attracting a healthier risk pool, 2017 promises to be a rocky year for insurance markets, regardless of which party is in control of the White House. …
Now that insurers have had more time to look at the claims coming in from those enrolling from Obamacare, they’re finding that the pool of customers is older and sicker than originally projected, driving up medical costs. Meanwhile, federal help isn’t what they anticipated.
CareFirst BlueCross BlueShield, the largest health insurer in Maryland, proposed an average increase of 30.4 percent for 2016 (with a range of 19.3 percent to 45.7 percent).
A similar story is playing out among insurers who have filed rate proposals throughout the country. BlueCross BlueShield of Tennessee asked for an average increase of 36.3 percent. In South Dakota, Wellmark proposed a 42.9 percentaverage increase.
In Oregon, Moda Health, which serves roughly half of the state’s individual market, is aiming to raise rates by an average of 25.6 percent. As Jed Graham of Investor’s Business Daily noted, Moda’s costs for 2014 – the first year of Obamacare’s exchanges — exceeded its premiums by 61.5 percent.
Read Klein’s full column at the Washington Examiner.