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From "Insurers See Double-Digit Price Rises in Many States Next Year" by David Morgan and Caroline Humer, Reuters Health Information at Medscape, March 24, 2014

U.S. consumers ... could see double-digit price hikes next year in states that fail to draw large numbers of [ACA] enrollees for 2014, including some states that have been hostile to the healthcare law, according to insurance industry officials and analysts.

The early estimates come as insurance companies set out to design plans they intend to sell in 2015 through the state-based health insurance marketplaces that are a centerpiece of the ...  domestic policy achievement that is widely referred to as Obamacare.

The cost of health insurance is already a political hot potato in this year's election campaign for control of Congress, with Republicans warning of the potential for sky-rocketing rates in their attempt to turn the ballot into a referendum on Obamacare.
The ACA is said to be serving about 5 million people currently, the employer-sponsored market about 170 million. March 31 is the enrollment deadline for 2014. Insurers submit proposed 2015 rates to insurance regulators in May and June.
The cost of health insurance is already a political hot potato in this year's election campaign for control of Congress, with Republicans warning of the potential for sky-rocketing rates in their attempt to turn the ballot into a referendum on Obamacare.
The industry anticipates increases from high single-digit percentages of cost to as much as 30% in the dozen-plus states with slow enrollment, technology failures (Massachusetts, Hawaii and Maryland), political opposition to the ACA and/or outright rejection (Louisiana, Texas, Kansas and Oklahoma), little competition between insurers, hands-off regulators, and retention of older health plans noncompliant with ACA.

Government data shows adults aged 18 to 34 enrolled at 25% compared to the ACA 38% target, disproportioning the demographics of pre-existing conditions, older age, and chronic illness.

Last week, U.S. Health and Human Services Secretary Kathleen Sebelius told a congressional committee: "I think premiums are likely to go up, but at a slower pace than what we've seen since 2010."
An 8% increase in net insurance costs was predicted by government actuaries. Additional "factors" figure in what prices will in fact be charged.
The nonpartisan Kaiser Family Foundation, which tracks healthcare trends, [anticipates] most states will see premium increases of 7% to 10% in 2015, as insurers compensate for factors including the rising cost of medical services and reduced funding for a temporary federal program that compensates insurers for high claim costs ... while some consumers should also benefit from aggressive state insurance regulators unwilling to allow big cost hikes.

And after the open enrollment period ends,

a steady stream of new customers is expected to transition into the Obamacare marketplaces throughout 2014, due to life changes that allow for special enrollments, including job loss, marriage and parenthood. As a result, insurers could find themselves under constant pressure to keep prices competitive.
One metric of enrollment success - and a potential indicator of future rate increases - is market penetration. In 16 states, sign-ups represent less than 10% of the potential marketplace population, according to a Kaiser Family Foundation study of enrollment data released by the administration on March 1. Analysts say those markets could skew toward older, sicker members, which raises the likelihood of rate increases. ... At the top of the enrollment success scale, Kaiser found that Vermont has enrolled 54% of its potential market, while California, Idaho, Maine, Michigan, New York, Rhode Island and Washington have each enrolled about 20% or more.
One health/business administrator commenting at Medscape singled out the major insurers for blame, saying they'd cut what healthcare providers receive
30 to 40% in the past two years, well ahead of their anticipated losses due to any Obamacare related expenses. Seems like they will take every opportunity to rake in high profits at everyone else's expense. I never even read an article that mentions what is happening to healthcare providers. I, for one, am no longer accepting insurance after 20 years.

Originally posted to mettle fatigue on Mon Mar 24, 2014 at 07:54 PM PDT.

Also republished by KosAbility and Sustainable Senior Living.

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Comment Preferences

  •  Prices "could" do anything -- go down, go up, (3+ / 0-)
    Recommended by:
    Pale Jenova, Pluto, mettle fatigue

    stay the same. Who knows? Anybody "could" write an article about anything, and as long as they couch all their statements in good cushy "coulds" who's to say they're wrong?

  •  Getting in bed with Snakes (3+ / 0-)

    This is what happens when the government gets into bed with snakes like the insurance industry.

    They are politically at the mercy of these companies right now as big premium increases would be catastrophic to Obamacare regardless of why or what the cause was.

    People won't care why, and the Republicans will demagogue the hell out of it.

    I detest that in some ways our political fortunes are now tied to the whims of corrupt health insurance companies.

  •  If they jack prices up too high (4+ / 0-)

    they run into the "medical loss ratio" requirement and must issue refunds. Provider inflation, on the other hand, is not addressed in the ACA. So if insurers can bludgeon provider prices down, they can't pocket the money. They have to issue refunds.

    And God said, "Let there be light"; and with a Big Bang, there was light. And God said "Ow! Ow My eyes!" and in a flash God separated light from darkness. "Whew! Now that's better. Now where was I. Oh yea . . ."

    by Pale Jenova on Mon Mar 24, 2014 at 09:10:20 PM PDT

    •  ACA provides incentives for an insurer to be (2+ / 0-)
      Recommended by:
      mettle fatigue, Pale Jenova

      price competitive but not to drive down medical costs significantly.

      As a minimum of 80% of premiums must be spent on healthcare for individuals and 85% for groups, if an insurance company drove down payments to providers significantly they would be less profitable not more profitable.  But they do need to be price competitive as many will choose insurance company based heavily on price.

      In addition, driving down healthcare costs increases the insurance company costs for administration - where each additional dollar spent is a dollar less for profit.

      ACA does not provide strong incentives for insurance companies to drive down healthcare costs.

      The most important way to protect the environment is not to have more than one child.

      by nextstep on Mon Mar 24, 2014 at 09:50:18 PM PDT

      [ Parent ]

      •  The day to day operation in insurance (1+ / 0-)
        Recommended by:
        mettle fatigue

        (when they aren't trying to weasel out of paying claims) is to try to push down costs -- and the costs come directly in the form of charges from providers. So yes, insurance companies do have a strong incentive to pay the providers less.

        Deals with providers usually take the form of, "if you accept a payment of X amount for these services, we will include you in our network and steer customers toward you." This model breaks down when hospitals consolidate and give the insurer a collective "F-you." The insurer responds by dropping the hospital conglomerate from their network.

        The member ends up with a "narrow" network and very few doctors available. But in this case, it's the provider's doing, since they can grub for profits every bit as fast as insurers.

        And God said, "Let there be light"; and with a Big Bang, there was light. And God said "Ow! Ow My eyes!" and in a flash God separated light from darkness. "Whew! Now that's better. Now where was I. Oh yea . . ."

        by Pale Jenova on Tue Mar 25, 2014 at 07:04:07 AM PDT

        [ Parent ]

        •  You are missing the ACA change. (1+ / 0-)
          Recommended by:
          mettle fatigue

          The insurance company does not get to keep the cost savings beyond their projected cost for healthcare services.  If the insurance company drives the payment to providers down by say $850, they lose $150 that would otherwise go to administration, taxes and profit.

          The most important way to protect the environment is not to have more than one child.

          by nextstep on Tue Mar 25, 2014 at 08:30:09 AM PDT

          [ Parent ]

    •  Provider Cost Issues Are Covered (2+ / 0-)
      Recommended by:
      mettle fatigue, Pale Jenova

      Oddly enough, although ACA directly doesn't address provider costs, various provisions in the Medicare legislation do affect provider costs.  They drive costs down.  And the insurers are not going to be willing to accept higher costs for non-Medicare members than they are for Medicare members in their enrollment for the same procedures.

      "Love the Truth, defend the Truth, speak the Truth, and hear the Truth" - Jan Hus, d.1415 CE

      by PrahaPartizan on Mon Mar 24, 2014 at 09:54:34 PM PDT

      [ Parent ]

      •  I partially agree (2+ / 0-)
        Recommended by:
        PrahaPartizan, mettle fatigue

        It's definitely indirect. In fact, some insurers have set up pricing apps make provider costs more transparent. If the consumer can check out hospital A and hospital B beforehand and see that hospital A charges four times as much for the same procedure as hospital B, not only can they make better choices but hospital A no longer works with the "sky is the limit" attitude on billing.

        Of course, if they had required provider cost transparency in the ACA to begin with . . . well, you know.

        And God said, "Let there be light"; and with a Big Bang, there was light. And God said "Ow! Ow My eyes!" and in a flash God separated light from darkness. "Whew! Now that's better. Now where was I. Oh yea . . ."

        by Pale Jenova on Tue Mar 25, 2014 at 07:07:23 AM PDT

        [ Parent ]

  •  USians are at the mercy of the insurance industry (1+ / 0-)
    Recommended by:
    mettle fatigue

    They can do whatever they like -- in concert with health care providers who are also part of the for-profit healthcare/financial sector of the stock market.

    But that was a known known when the Bill was passed.

    Without a public option, the US national health care system is based on a conflict of interest between the medical needs pf patients and the size of profits paid to shareholders.

    While, this is in no way sustainable, it is introducing a rare human right to USians. And, I believe the consciousness that results from that is going to change everything.

  •  It is the nature of middlemen to take from (1+ / 0-)
    Recommended by:
    mettle fatigue

    both sides in a transaction. That their profits are capped is supposed to counter the habit of taking as much as they can get.
    Somebody's got to do the accounting. Whether it's a public bureaucracy or a so-called "private" one doesn't much matter, if the charges are fixed and pre-determined. How many bureaucrats does it take to handle six million new accounts?
    Bureaucrats, by the way, are not inherently bad. They're people who keep accounts/files in file drawers. They're the record keepers. That's why malefactors vilify them. If a politician inveighs against the bureaucrats, you can be sure he's doing something he doesn't want recorded.

    http://hannah.smith-family.com

    by hannah on Tue Mar 25, 2014 at 01:14:18 AM PDT

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