It's Working: Insurers Project 'Substantial Increases' in 2017 Obamacare Premiums

Guy Benson
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Posted: Apr 26, 2016 4:15 PM
It's Working: Insurers Project 'Substantial Increases' in 2017 Obamacare Premiums

The drumbeat of bad Obamacare news continues apace. Over the last few weeks, (1) the nation's largest insurer pulled out of most states' exchanges, citing more than $1 billion in losses incurred over the last two years. The reason? Unsustainable demographics, wherein relatively young and healthy people eschew the unpopular program (largely due to lack of affordability), leaving its risk pools laden with older, sicker consumers who are more expensive to insure.  (2) The Congressional Budget Office again scaled back its enrollment projections, further trimming a number it had already revised downward by 8 million people.  (3) The nonpartisan scorekeeper also predicted that the number of uninsured Americans will increase by 2 million over the next decade. (4) A new report indicated that up to eight of the 11 remaining Obamacare co-ops are likely to collapse within the next year, joining the ash heap of a dozen previous state-level failures. (5) A former Obama administration official who now serves as president of a major health insurance lobbying group predicted additional premium increases for next year, echoing industry insiders who've warned that additional market departures and rate hikes will be needed to compensate for the higher-than-expected costs of participating in Obamacare.  And now it looks like the law is forcing insurance companies to put their your money where their mouths are:

Health insurance companies are laying the groundwork for substantial increases in ObamaCare premiums, opening up a line of attack for Republicans in a presidential election year. Many insurers have been losing money on the ObamaCare marketplaces, in part because they set their premiums too low when the plans started in 2014. The companies are now expected to seek substantial price increases...Insurers are already making the case for premium increases, pointing to a pool of enrollees that is smaller, sicker and costlier than they expected. The Blue Cross Blue Shield Association released a widely publicized report last month that said new enrollees under ObamaCare had 22 percent higher medical costs than people who received coverage through their employers. “The industry is clearly setting the stage for bigger premium increases in 2017,” said Larry Levitt, an expert on the health law at the Kaiser Family Foundation. The proposals for premium increases, which will be rolled out over the next couple of months, still have to be approved by state insurance commissioners. The ultimate impact on consumers will be hard to determine, as ObamaCare’s tax credits often soften the blow.

Here's the problem with that "soften the blow" silver lining: Those tax credit subsidies don't grow on trees.  They're paid for by taxpayer dollars as part of a redistribution scheme, which relies on a bevy of Obamacare tax increases.  Also, even heavily-subsidized Americans are discovering that affordable coverage remains out of their grasp thanks to prohibitively high out-of-pocket costs.  Sure, these people could pay a relative pittance in monthly rates thanks to the mandatory generosity of their fellow Americans, but in order for that coverage to kick in at all, they first have to exhaust deductibles that run in the thousands of dollars.  For many, this renders their much-celebrated coverage effectively useless.  And now premiums are once again on the rise, adding insult to injury.  Leftists will either dismiss all of this evidence and blindly applaud the law's "success" -- Hillary Clinton's preferred approach as Obamacare's Godmother -- or they'll cite is as evidence that a full-blown government-run, single-payer system is necessary.  That's the preference of Bernie Sanders, who never mentions that his own left-wing state scrapped its planned adoption of single-payer healthcare because it was farcically, ruinously expensive.  While we're on the subject of of single-payer regimes, here's the latest development out of Britain's NHS utopia:

Junior doctors walked out of routine and emergency care at 08:00 BST. The strike affects A&E, maternity and intensive care for the first time. Health Secretary Jeremy Hunt expressed disappointment that the stoppage was taking place, but again said the government would not back down and halt the imposition of the new contract. The walkout ends at 17:00 BST with further all-out action due to take place on Wednesday, between the same hours, in the protest against the imposition of the new contract from the summer. Speaking to the BBC, Mr Hunt described it as a "very, very bleak day" for the NHS, but said no union had the right to stop a government trying to act on a manifesto promise. "The reason this has happened is because the government has been unable to negotiate sensibly and reasonably with the BMA." Before the strike, government sources had indicated that they could not give in because the row had become political, with the BMA trying to topple the government, and other unions watching the dispute "like hawks".

When the government runs your healthcare, your healthcare can become a political pawn whenever special interest forces like public sector unions decide something like a doctor strike would benefit their narrow financial or partisan interests. This is the same system that has been besieged with the sort of patient-clobbering scandals and horrible wait times that have engulfed the government-run VA system here in the United States.  I'll leave you with Washington Post columnist Marc Thiessen describing why Obamacare will long linger as the glittering crown jewel in this president's domestic legacy of failure:

Domestically, Ronald Reagan told the American people: “The nine most terrifying words in the English language are ‘I’m from the government, and I’m here to help.’ ” Obama wanted to convince Americans that they were not terrifying. And the way he was going to do it was through the only great liberal legislative achievement of his presidency: Obamacare. He failed. Even before he leaves office, Obamacare has begun unraveling. The law was passed over the objections of a majority of Americans, it is still opposed by a majority of Americans — and their opposition has been vindicated...Because commercial insurers are not going to keep bleeding cash to prop up Obamacare, they have three choices: 1) scale back coverage, 2) raise prices or 3) get out of the exchanges entirely. More and more are going to choose option 3. Does this mean that Obamacare is finally entering its “death spiral”? Not exactly. As my American Enterprise Institute colleague Scott Gottlieb explains, while commercial insurers are starting to leave Obamacare, they are being replaced by Medicaid health maintenance organizations (HMOs) offering skimpy plans that mirror what they offer in Medicaid — our nation’s emergency health insurance program for the poorest of the poor.

This is a catastrophe for people stuck in Obamacare. According to a 2014 McKinsey survey, about three-quarters of those in the exchanges were previously insured on commercial plans, either through their employers or the individual market. They were doing fine without taxpayer-subsidized insurance but were pushed into Obamacare. They now face rising premiums and smaller provider networks — and as commercial insurers flee, they will increasingly be stuck in horrible, Medicaid-style plans. This is not what the president promised when he sold Obamacare to the American people. The president promised Obamacare would provide “more choice, more competition, lower costs.” Instead, Americans have less choice, less competition and higher costs.

In a 2013 commencement address at Ohio State, President Obama urged graduates to reject "cynical" critics of big government. How's that government-rehabilitation project going? Thiessen concludes: "With Obamacare, Obama wanted to restore America’s faith in big government. Instead, the opposite has happened. Today, 69 percent of Americans say big government is 'the biggest threat to the country in the future' (ahead of big business or big labor). That figure, which is slightly down from 72 percent in 2013, is higher under Obama than it has been since Gallup began asking the question about 50 years ago. Obamacare has done more to discredit big government than 1,000 Reagan speeches ever did. That, in the end, will be Obama’s enduring domestic legacy." Amen. Expansive, intrusive government -- even granting its advocates' good intentions -- is frequently a picture of incompetence.  It fails to meet its lofty promises, and all too often hurts the very people people it ostensibly seeks to help, all while sticking hardworking taxpayers with the bill.