Just how many years will give us headlines about Obamacare sticker shock? When does the shock end?
Megan McArdle has a headline that sound familiar: “Sticker Shock for Some Obamacare Customers.”
Why so familiar? Well, one of my headlines from December 24, 2013, mentions Obamacare sticker shock. That was referring to the deductibles. I also linked a late October post of mine that pointed to an NBC News story saying that Obamacare sticker shock was hitting those shopping for the new insurance. The next day Bob Allen posted about Obamacare sticker shock and included this video:
The point here is that from 2013 to now looking ahead to 2016 we are still hearing about Obamacare sticker shock. Here’s another story from March 2014, for example. Just go to Google News and search for “Obamacare” and “sticker shock” and see the stories through the years.
So what is the new Obamacare sticker shock? As McArdle writes,
So the proposed 2016 Obamacare rates have been filed in many states, and in many states, the numbers are eye-popping. Market leaders are requesting double-digit increases in a lot of places. Some of the biggest are really double-digit: 51 percent in New Mexico, 36 percent in Tennessee, 30 percent in Maryland, 25 percent in Oregon. The reason? They say that with a full year of claims data under their belt for the first time since Obamacare went into effect, they’re finding the insurance pool was considerably older and sicker than expected.
Than expected? Really? A much more believable scenario is that the government pressured the insurance industry to be wildly optimistic and now reality is hitting.
As it turns out, the insurer filings are public information, available on state websites. And in the three cases where I could see supporting data about premium revenue and losses, those losses appear to be large. Moda of Oregon says that its claims were 139 percent of revenue, making for a margin of -61 percent. If I am reading their somewhat confusing table right, Health Service Corporation of New Mexico says it lost $23 million on revenue of $121 million. CareFirst of Maryland says that claims were 120 percent of revenue, which if we add in some money to pay for overhead, amounts to … less than or equal to what they’re asking from regulators. I can’t find claims experience data for Tennessee, but that state told the Wall Street Journal that it lost $141 million on exchange plans last year.
Obamacare is moving from failure to failure. It is a never-ending ride of repeated sticker shocks.