By: Zack Duvall
Insurers across the nation are drastically raising rates, yet again, for individual health insurance plans sold under the regulations of the Affordable Care Act, better known as Obamacare, nationwide starting in 2018. With some of these rate increases being over 50% of current policy prices.
The news of the next round of rate hikes set to impact millions of Americans, comes as state insurance regulators and commissioners hint that approving such dramatic increases was the only way to get companies to continue offering plans in state marketplaces.
Georgia’s state insurance commissioner, Ralph Hudgens, said in a statement about the 57.5% increase to rates in his state alone, that the decision was made after Anthem, the biggest insurer offering Obamacare plans in the state, pulled out of all exchanges in Georgia except a few of Georgia’s most rural areas, who otherwise wouldn’t of had a company offering plans in their marketplaces. Hudgens also joined the many Americans urging Congressional leaders to develop some kind of solution to the failing healthcare law.
“Obamacare has become even more unaffordable for the middle class. I am disappointed by reports that the latest Obamacare repeal has stalled once again and urge Congress to take action to end this failed health insurance experiment.” Hudgens said in his statement released last week.
Georgia isn’t the only state that is set to be impacted with huge rate increases, rates in Florida are said to be increasing by 45%, rates in New Mexico will increase by 30% and rates going up 14% in New York.
With officials warning that almost all U.S. states are on track to experience substantial increase next year, but some states do not make public rate hikes until they take effect.
Experts say the range of price increases will be 10-60% nationwide and will mainly impact Americans who make earn too much to qualify for financial assistance from the federal government to obtain their healthcare.
The final prices and polices that will be offered aren’t expected to be available until November 1.
Those who can’t obtain a subsidy, will be forced to sort through the plans offered then and find one that they can afford, with many Americans set to be forced to have to look beyond their state marketplaces for plans that aren’t impacted by the rate hikes of the ACA. Plans that may offer little coverage and would be considered “bare bones” polices.
Despite polarizing opinions on the ACA and the huge rate hikes that the law is causing, many experts and officials say that due to the regulations involved with the healthcare law rate hikes are “unavoidable” and that feckless ineffective leadership is contributing majorly to the uncertainty that insurers are feeling about the marketplaces and their sustainability.
“Half of that increase is due to the uncertainty in Washington and the inability to lead.” John Franchini, the state insurance regulator for New Mexico, said of his state’s planned rate hikes.
The uncertainty that is often referred to by experts is whether or not the federal governemnt will continue to make “cost-sharing” payments that insurers depend on to keep the state Obamacare marketplaces and exchanges operating. With out those allotted funds, the ACA would fall apart in “about a month”.
The Trump administration has put pressure on lawmakers to develop an alternative to Obamacare by say that the payments are on a “month-to-month” basis and would review the issue after the Republican push to pass a new healthcare law, which stalled yet again last week in the Senate.
Another key element that state insurance regulators have to take into account when deciding on approving these dramatic rate increases is that for virtually every insurer in the ACA, profits are just now being seen as of this past year, with some still remaining to see any substantial return on investment due to healthy and younger Americans opting out of the program.
“It.s very hard for a regulator to deny those rate increases when we can look at their bottom line and can tell they can’t continue if they can’t keep their heads above water.” Mike Kreidler, Washington State’s insurance commissioner, told reporters during an interview in Seattle.
Other industry experts, such as Kurt Giesa, agree with Kreidler and say that insurers are doing everything they can to continue providing plans for the millions of Americans who depend on them, but that the ACA is a failing program with too many regulations.
“The insurers are really struggling. They have been working hard to adapt to what they are faced with right now.” Giesa, a consultant who works with regulators across the country to address the rate hikes, said on Tuesday.
With the ACA continuing to fall apart and become even more of a burden on the million of Americans impacted by the law, industry leaders say that the situation could turn into a “death spiral” if rates continue to rise at such drastic increments and healthier Americans chose not to enroll in the plans.
“Given the size of the rate increases, we think healthier people will continue to opt-out of coverage. If that happens then you’re in a death spiral.” Chet Burrell, the former chief executive of CareFirst insurance company told reporters i New York last week.
Republicans have said they plan to take the issue up again at the start of 2018 now that Democrats have the ability to filibuster any healthcare legislation and GOP leadership would need 8 Democrat Senator’s support under new procedural rules.
Until then, Americans are set to pay dramatically more for their healthcare coverage.