Now we have further confirmation that Obamacare prices are going to spike even more.
So far, Obamacare seems to be designed to throw massive amounts of money at insurance companies. I don’t doubt that rationing will also come as an effort to restrain these prices, but for now they are just allowing the public to be gouged.
CNBC reports on “Obamacare’s many double-digit price hikes for next year.”
Insurers have asked for double-digit rate increases for nearly 1 out of every 3 Obamacare plans that will be sold on HealthCare.gov for 2016 coverage, according to a new analysis.
And in three states—Delaware, South Dakota and West Virginia—every plan sold on HealthCare.gov is asking for 10 percent or more hikes in the prices of their premiums for next year, AgileHealthInsurance.com said in its report.
You may remember that, at the beginning of the summer, Politico reported that some regions were going to see rates go up by fifty percent. I suppose you can then interpret this more recent update as good news. Rates are, reportedly, going up “only” by ten percent or more in many places.
But that is probably why we got the higher numbers in the first place. Insurance companies new the government would not approve of such a high rate change but they asked for the increase in order to be in a good negotiating position. A ten percent increase in rate is still a lot of money.
…the fact that many plans want to raise prices steeply for 2016 suggests to [Sam] Gibbs [executive director of AgileHealthInsurance.com] that the Obamacare market is starting to more accurately reflect the actual cost of covering millions of new customers.
“You’re starting to see kind of a normalization of the plans,” he said.
Gibbs said that in 2014, the first year of Obamacare enrollment, insurers faced pressure “to really keep the rates low initially,” and many had an incentive to do so because they wanted to gain market share on the new exchanges.
When insurers proposed prices in mid-2014 for the current year, they had little data on how customers were using their new benefits, and how much that was costing the plans.
Now, insurers have much more comprehensive data about health-care utilization by their customers, and also know that some financial shock absorbers built into the Affordable Care Act designed to lower their potential losses will be expiring in 2017, Gibbs said. Those factors are leading some plans to boost rates more dramatically for 2016 than they had done for 2015.
The CNBC article reassures us that many will get subsidies so that the price increase will not be as noticeable. But that just means government spending (and thus government debt) is going up even faster.
What seems to be missing from the CNBC story is any mention of the cause of these rate increases. Is the higher price due to a lack of participation by young people?