Sticker Shock: Obamacare Premiums Could Rise By Double-Digits

Posted: Apr 30, 2016 5:00 PM
Sticker Shock: Obamacare Premiums Could Rise By Double-Digits

Guy mentioned this earlier this week, but Obamacare’s premiums are going to rise—and it’s an absolute nightmare. The groundwork for health providers re-entering the Obamacare market all point to steep premium hikes. This, plus the rather shoddy quality of coverage, has many Americans opting to pay the penalty to remain uninsured because it’s better for them economically. Americans would rather gamble on possible bankruptcy due to a medical emergency than buy into Obamacare. UnitedHealth posted more than $1 billion in losses before pulling out of the Obamacare market in two states. In fact, the 2016 projections for Obamacare enrollees by the Congressional Budget Office were off by 24 million. In the process, millions have lost their health insurance. There’s also the serial failure of the Obamacare exchanges, which has cost taxpayers billions of dollars. It gets worse—we’re looking at double-digit premium spikes for this year (via Associated Press):

Insurers will seek significant premium hikes under President Barack Obama's health care law this summer - stiff medicine for consumers and voters ahead of the national political conventions.

Expect the state-by-state premium requests to reflect what insurers see as the bottom line: The health law has been a financial drain for many companies. They're setting the stage for 2017 hikes that could reach well into the double digits, in some cases.

For example, in Virginia, a state that reports early, nine insurers returning to the marketplace are seeking average premium increases that range from 9.4 percent to 37.1 percent. Those initial estimates filed with the state may change.

More than 12 million people nationwide get coverage though the health law's markets, which offer subsidized private insurance. But the increases could also affect several million who purchase individual policies outside the government system.

Going into their fourth year, the health law's markets are still searching for stability. That's in contrast to more-established government programs like Medicaid and Medicare Advantage, in which private insurers profitably cover tens of millions of people.

The health law's nagging problems center on lower-than-hoped-for enrollment, sicker-than-expected customers, and a balky internal stabilization system that didn't deliver as advertised and was already scheduled to be pared back next year.

This year, premiums for a benchmark silver plan rose by a little more than 7 percent on average, according to administration figures. A spike for 2017 would fire up the long-running political debate over the divisive law, which persists despite two Supreme Court decisions upholding Obama's signature program, and the president's veto of a Republican repeal bill.

No wonder why this law is so unpopular.