Premiums rising (holding on by our fingernails until Medicare kicks in)

Premiums rising

by digby


Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.

Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.

In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers’ filings with the state for 2013. These rate requests are all the more striking after a 39 percent rise sought by Anthem Blue Cross in 2010 helped give impetus to the law, known as the Affordable Care Act, which was passed the same year and will not be fully in effect until 2014.

In other states, like Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders. The rate increases can amount to several hundred dollars a month.

The proposed increases compare with about 4 percent for families with employer-based policies.

Under the health care law, regulators are now required to review any request for a rate increase of 10 percent or more; the requests are posted on a federal Web site,, along with regulators’ evaluations.

The review process not only reveals the sharp disparity in the rates themselves, it also demonstrates the striking difference between places like New York, one of the 37 states where legislatures have given regulators some authority to deny or roll back rates deemed excessive, and California, which is among the states that do not have that ability.

New York, for example, recently used its sweeping powers to hold rate increases for 2013 in the individual and small group markets to under 10 percent. California can review rate requests for technical errors but cannot deny rate increases.

For those of us who depend on the private insurance market and make a modest living, especially those of us in our 50s who are already paying through the nose, these premiums are just terrifying. (Did I mention that I live in California?)

The ACA has no provision for this. It relies on the exchanges to make insurers "competitive" so that people like me will get one of these price increases and go shopping for cheaper insurance. But the prices are already ridiculously high across the board and are only going to go higher. The subsidies will not help the average middle class very much, unfortunately, although they will help a little. At this rate, we'll be lucky not to end up paying more than we already pay even with them. Even the allegedly small 10% hike in New York is more than many people can easily afford.

I doubt that it will change the overall view of the ACA, however, because most people are still covered by their employer and don't face this directly, which was always one of the law's clever political strengths. The only ones who will complain are the same small percentage of people who were most affected by the dysfunctional health care system to begin with --- those who are trying to afford private health insurance. I would guess the fallback for many for the time being will be the same as it ever was: don't buy it and keep their fingers crossed that they don't get sick. (It's doubtful the small fine will be much of an incentive at these prices.)

For those of us who will bite the bullet and sacrifice even more to afford these onerous premiums, there are some compensations. We get some free preventive care we previously had to pay for. And obviously, it's nice to know that you can't be turned down for insurance if you have a bad diagnosis. But this premium cost problem is huge, especially for middle-aged people in the private market who aren't well-off.

Oh, and by the way:

Federal regulators contend that premiums would be higher still without the law, which also sets limits on profits and administrative costs and provides for rebates if insurers exceed those limits.

Critics, like Dave Jones, the California insurance commissioner and one of two health plan regulators in that state, said that without a federal provision giving all regulators the ability to deny excessive rate increases, some insurance companies can raise rates as much as they did before the law was enacted.

“This is business as usual,” Mr. Jones said. “It’s a huge loophole in the Affordable Care Act,” he said.

But not to worry. I was assured by many people that all such problems would be tweaked and fixed later --- there was no way that once it was enacted Obamacare wouldn't just get better and better over time. And maybe that's true. But considering the Supreme Court's ruling on the Medicaid expansion and governors refusing to create the exchanges and the discovery of loopholes like this, it's going to be a long time in coming. So let's have no more talk about raising the Medicare age. Many Americans are just trying to hang on by their fingernails until they can get some real health security. And that's not going to change for a while.