Report: Obamacare Enrollees May Have to Switch Plans or Pay More in 2015

Posted: Jun 27, 2014 10:22 AM

Vox, a. oft-criticized lefty "explanatory journalism" site, brings good good tidings of great joy for Obamacare's 8 million 6.5 million 2.6 million newly- enrolled exchange consumers. Namely, many of them will face the choice of switching plans or possibly paying significantly more for coverage in 2015.

Unless they change their insurance plans next year, many people with insurance subsidies could see their premiums go up more than they expect, according to a new report from Avalere Health...Annual changes to insurance premiums aren't uniform across plans. That means the "benchmark plan" can change from year to year — with financial consequences for those with subsidies. These consequences will be most acutely felt by low-income enrollees. "Two-thirds of people enrolling in silver plans are choosing one of the two lowest cost silver options," said Caroline Pearson, vice president at Avalere. Take Sue, an imaginary Maryland resident who enrolled in her state's benchmark plan for 2014. With her subsidy, she was paying $58 a month for health insurance. But in 2015, her plan is going from the second-cheapest silver option to the ninth-cheapest. The subsidy, now pegged to a different plan, won't cover as much of Sue's premium as it used to. Her share of the premium will climb to $94, a 62 percent increase.

The piece includes this chart depicting what "Sue" would experience if she didn't change her plan:

The article goes on to that new HHS regulations "would require insurers to notify enrollees of their new expected premium payment prior to renewal," so customers would get a heads-up that simply renewing their existing plan could cost them a bundle. But the White House is also seeking to offer an automatic renewal option for enrollees, which may discourage people from looking at the fine print until their higher bill shows up in the mail. The Vox author dutifully notes that 2015 premium growth has been thus far been "modest by historical standards." Setting aside the facts that (a) we were all promised sharp premium decreases under Obamacare, and (b) many consumers across the country are likely to experience double-digit hikes, crowing about less-bad-than-they-could-be rate increases ignores the issue of high out-of-pocket costs for consumers who choose plans with relatively low monthly payments. Media reports have detailed this issue, and a friend who is entering the individual market recently puts a human face on those statistics. Under her previous individual market plan, she paid $90 per month along with a $1,500 deductible. Her new Obamacare-compliant plan features a monthly payment of $130, and her deductible will soar to $6,500 -- more than quadruple the previous amount. In practice, she'll have to pay more than six grand out of her pocket before the coverage she's faithfully paying for each month (at an elevated rate) even kicks in. Such are the wages of the "Affordable" Care Act for this healthy young woman buying coverage in the Southwest. Meanwhile, insurers in Michigan have announced their projected premiums for next year, and they're all going in one direction. The reasons behind the increases should not surprise anyone who's been paying attention:

All insurers in the state are hiking their premiums, from 2.7 percent up to 21.6 percent. Michigan’s largest insurers, Blue Care Network and Blue Cross Blue Shield, are hiking premiums by an average of 9.3 percent and 9.7 percent in 2015 for a whopping three-quarters of Michigan residents that purchase their coverage on or off the state’s Obamacare exchange. Blue Cross executive Terry Burke said the hikes are needed to account for ever-rising health care costs and uncertainty related to the Obamacare expansion bringing in sicker-than-average patients. “We’ve got a big influx of people and we don’t know what their claims conditions are,” Burke told the South Bend Tribune. “The actuaries are concerned about that risk mix.” The next largest insurer, Humana, is hiking rates by 18 percent on average for its 16,600 customers. Smaller insurers are upping their premium rates in a wider range, from around 3 percent to as high as 21 percent.

The DC also reports that a top healthcare economist expects "that the full brunt of Obamacare rate hikes will hit in 2017, the year after temporary risk mitigation provisions — and a potential insurer bailout — end." CNBC's Jake Novak argues that the biggest winners under Obamacare thus far are insurance companies. Finally, here's a family practitioner from Pennsylvania explaining why he's facing thousands of dollars in Obamacare mandate-related fines, and why he believes the law is stamping out small medical practices:

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