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Hello, Higher Premiums!
September 8, 2010
This past April I wrote about the potential for ObamaCare to increase premiums for young adults by as much as 17%, or roughly $42 each month. That’s certainly not an insignificant sum as all Americans continue to cut back on expenses to try and make ends meet. Now we’re hearing that premiums could increase as much as 20%, and not just for young people. In today's Wall Street Journal, we read that companies such as Aetna Inc., BlueCross BlueShield, and other smaller carriers have asked for premium increases in response to the new health care law.
As expected, health insurers are saying they must raise their rates in order to comply with new health care mandates, including new benefits to enable children to stay on their parents’ plan until they are 26 and eliminate lifetime and certain annual coverage caps. While insurers do have to submit any proposed fee changes to designated regulators for official approval, the process varies by state. Kansas Insurance Commissioner Sandy Praeger says she can ‘deny only rate increases that are unreasonable and discriminatory.’ Needless to say, insurers are smart enough to avoid hikes that are in blatant violation of the law, so I wouldn’t place too much hope in the Obama Administration’s claim that regulators will block large increases. After all, didn’t the same Administration once promise to spare families making less than $250,000 a year from higher taxes? We know that didn’t happen!
According to the WSJ, “The rate increases largely apply to policies for individuals and small businesses and don’t include people covered by a big employer or Medicare.” Approximately 9% of Americans purchase coverage through an individual plan and 1/5 of workers (who receive insurance through their employer) work at a company with 50 or fewer employees. Futhermore, the Seattle Times reports that these increases may be larger for individuals whose ages end in "5" or "0" because insurers can "hike rates for each five-year increase in age." The newspaper cites a 60-year-old self-employed hairdresser in Washington who just witnessed her health insurance go from $643 to $899 per month. While increases may primarily apply to new policies written after October 1, individuals will be subject to them if they alter their existing plans - many of which are likely to become inadequate once other options are presented.
Yet another reason why ObamaCare is bad news for taxpayers and must be repealed.
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