Health care premiums could soar in ‘15, insiders say

Despite the White House's assurances otherwise, insurance industry insiders are whispering that Obamacare is going to drive premiums sky-high.

By Money Staff Mar 20, 2014 5:21PM

This post comes from Brianna Ehley at partner site The Fiscal Times.


The Fiscal Times on MSN MoneyHealth insurance premiums will likely skyrocket next year, despite the Obama administration's consistent assurance that consumers will not experience sticker shock under the president's health care law.


Medical doctor © Corbis/SuperStockThat's according to industry insiders who told The Hill that they are expecting the price of monthly premiums to increase significantly. In some states, rates could increase by as much as 300 percent.


"There is extensive concern about rate increases next year," said Avalere Health's Vice President Caroline Pearson. "Particularly since early exchange enrollment is skewed toward older enrollees, some are concerned that plans will need to raise prices in 2015."


Rates won't be announced until the fall, however, and Pearson cautioned that it's still too early to know what they are likely to be since the enrollment period for this year is still ongoing.

The industry's concerns of rising premiums are largely out of step with Health and Human Services Secretary Kathleen Sebelius's comments at a congressional hearing last week, where the secretary downplayed any potential sticker shock.


"The increases are far less significant than what they were prior to the Affordable Care Act," Sebelius said in testimony before the House Ways and Means Committee.


But insurers say a combination of Obamacare's new taxes and fees, as well as rule changes and delays announced to cope with the rocky rollout, will likely contribute to higher than expected rates.


For instance, the administration's decision to allow people to keep their old policies likely means that fewer people than anticipated are enrolling on the new exchanges.


This is bad news for the Obama administration, which has routinely pointed out that premiums on the exchanges are less expensive than comparable employer-based policies. While premiums may be cheaper, out of pocket costs on exchange plans tend to be higher. A survey by HealthPocket.com found the deductibles on the exchange plans were 42 percent higher than employer based policies. But now, insurers say Obamacare consumers can expect to experience sticker shock from both premiums and deductibles.


Still, administration officials as well as health policy experts say the rising cost of premiums and deductibles were an issue even before the law took effect.


"The bottom line is that we just don't know. Premiums were rising 7 to 10 percent a year before the law. So the question is whether we will see a continuation of that sort of single digit increase, as Sebelius said, or whether it will be larger," MIT professor and one of the architects of Obamacare, Jonathan Gruber told The Hill.


Insurers say not everyone will see premiums rise significantly. That's because the rates vary depending on the region and carriers available in the area.


For instance, counties that have a population that skews older or have only one major hospital system in the area will likely be hit with higher premiums. In contrast, places with a mix of healthier younger people and more competition for providers will likely see lower premiums.


More from The Fiscal Times


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12Comments
Mar 20, 2014 6:49PM
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So....The insurance I liked and wanted to keep (so Obama said) was cancelled, and now I am forced to pay 25% more per month for my "affordable" health care insurance.  My premium went from 400 per month to 500 per month just for me.  This is the highest annual increase I have ever seen in the 40 years I have been buying insurance. 

 

Thanks Obama - you're really helping a lot........ Go back to community organizing - you did a lot less damage there. 

Mar 20, 2014 7:11PM
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It's ALREADY driving premiums "sky high"...
Mar 20, 2014 9:35PM
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the elephant in the room is obozocare. it will be in that election booth also come november.
Mar 21, 2014 9:39AM
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It already drove prices much higher, for those that are paying for private insurance (through our employer's policy).  My insurance costs $750/mth for 2 of us (PLUS higher deductibles, co-pays, etc.)  If my costs triple to $2,250 ($27,000/yearly), I will no longer be able to afford health insurance.  The UNAFFORDABLE care act.

Mar 21, 2014 7:54AM
Mar 21, 2014 1:56PM
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I work in healthcare and we are already feeling the effect of this terrible law.  Doctors and hospitals will be paid less and as that happens, doctors will elect not to see patient with insurance purchased through exchanges because the insurance companies are deeply discounting doctors fees in order to be able to offer all the services required under the law.  Hospitals similarly are seeing their reimbursement drop.  In response, the hospitals will hire fewer workers and pay existing workers less while charging more for the employee's "employer provided" health care plan.  Many of the exchange plans are akin to Medicaid which means you can't find a private doctor to see you and are relegated to seeking medical care in clinics.  As Medicare rates approach Medicaid rates, already built into this law, doctors will stop seeing Medicare and seniors will also find themselves in clinic style care.  What a mess.  My advise to family and friends, don't get sick!
Mar 21, 2014 3:33PM
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Just add this to the stack of Obama lies.
Mar 21, 2014 1:19PM
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In hindsight the D's made a very foolish and amateurish political mistake in passing the ACA without Rep support.  I do believe the intention was good and something had to be done to address the uninsured and underinsured but without R support the D's now "own it"  and can't be fixed without R support, which of course will not be coming because the R's don't want to "own it".  What a mess.
Mar 21, 2014 12:16PM
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The companies are trying to scare us.
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