Health Insurance Rate Sticker Shock
Get ready for some serious sticker shock when it comes to renewing health insurance under Obamacare this fall. On Monday, The Centers for Medicare and Medicaid Services (CMS), which oversees implementation of Obamacare, released data showing that health insurance companies are seeking double-digit rate increases. Insurers are citing Higher-than-expected health care services costs and decidedly higher prices for pharmaceuticals as the primary driver behind the extraordinarily high rate increases. In addition, the price of emergency room use, as well as treatments for cancer and chronic heart conditions stood out as aggressive cost drivers. One type of pharmaceutical in particular, a drug to treat hepatitis C, stood out as a poster child for higher pharmaceutical prices.
For example, Blue Cross and Blue Shield of North Carolina is seeking a 26 percent rate increase. Blue Cross and Blue Shield of Illinois is requesting a 38 percent rate increase on one particular low-premium health insurance plan. Other insurance companies, particularly in Illinois and Florida, are seeking insurance rate increases of over 20 percent. Interestingly, however, there are no rate hikes shown for California or New York in the data released Monday by CMS. Industry experts are cautioning that the data released Monday by CMS does not represent the full set of health insurance rate changes being requested by all insurers. So, the overall rate picture will not be clear until later in the summer and will not become official unless and until the new rates are approved by CMS in the fall. The new health care law only requires insurers to report increases of 10 percent or higher. Whether these higher rates are widespread or just sparse examples will not be known until October.
“It’s hard to generalize, but that said, I think all signs are pointing to bigger premium increases than in 2015,” Kaiser Family Foundation’s Larry Levitt told the Associated Press.
“Part of the reason is that insurers will be basing their 2016 premiums on a full year’s worth of cost or claims data. That’s the first time that has happened for plans sold on the overhaul’s public insurance exchanges, which started enrolling customers in the fall of 2013” Levitt continued.
These insurance rate increase request come as a very interesting backdrop to the pending Supreme Court decision regarding the validity of Obamacare’s practice of using tax credits to offset the cost of premiums for lower-income insured individuals in most states in the country.
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