Obamacare Premiums Increase Once Again

The death spiral of Obamacare continues as premiums are set to skyrocket in Maryland and Virginia

Surprising absolutely no one, the Obamacare debacle continues to unveil itself. And just like any dead-end big government initiative this one has no end in sight. Insurers in my home republic of Maryland are requesting premium hikes in the range of 18% to 91% for coverage sold through the ACA. The average is roughly around 30%. Virginia insurers have requested premium hikes of up to 64%.

The culprit, some experts are claiming, is that the repeal of the individual mandate has caused healthier people to drop their coverage and in turn decreased positive cash flow into the marketplace. While true to an extent, premiums already increased drastically—doubled—since Obamacare’s inception. Why? Mandated coverage for pre-existing conditions. Sicker people are guaranteed coverage that is disproportionate to the amount of money they pay, if any.

The problem is only going to get worse.

If you dig down into the numbers the top line 91% increase in premiums is for PPO plans. Who uses PPOs? Sick people. They’re also receiving a large amount of subsidies to offset the costs. Healthy people usually purchase HMOs. Since there are no healthy/younger people to offset the costs in the PPO crowd guess what happens? Yep, substantial premium increases for PPOs while less aggressive increases for HMOs. Does it matter to the sick people? Not when they’re receiving taxpayer subsidies.

The increased costs of PPOs also make it unaffordable for middle-income healthy people to even entertain the idea of purchasing a PPO, which tend to have better quality plans. Then there’s also the fact that these insurers are weakening their own products/coverage in a race to the bottom. Wonderful, really wonderful work by the government.

But how long will insurers remain in the PPO market? Is it only a matter of time until insurers do away with PPOs, which then will dump the sick people into the HMO crowd? What happens then? We will see substantial increases for healthy people who do not receive government subsidies while those with pre-existing conditions will continue to receive coverage with no financial repercussions. Healthy people won’t purchase health insurance because it’s not unaffordable. The death spirals continue.

I know it is some people’s inclination to blame health insurance companies. Yes, they are part of the problem. Or maybe it’s politicians who receive large chunk of campaign donations from the industry.

The law should have been repealed. There’s no doubt about it. There are better ways to deal with this debacle.

Comments
No. 1-9
etbass
etbass

I was referring to my company. It's weighted to a average for all our employees. The average age is close to 50. I'm not, but the rate is based all the employees.

thefirstRowdyone
thefirstRowdyone

Obamacare will not go away; instead it may well be the vehicle that moves us into a single payer healthcare system. Perhaps that is the intent by Dem's and GOP alike. When the current system fails; as it surely will, there will be a loud cry for government to "fix" the system, and they will! They will take control of ALL health care for everyone; the real disaster will become permanent as it is in other "socialized" countries. There will be no pathway back to sanity!

Thomas Swander
Thomas Swander

Not one Republican voted for Obama care. For once, it's really not our fault. If you don't like the plan, call Senators Murkowski, Collins and McCain.

WinstonT
WinstonT

@etbass -- Congratulations on being young and healthy, and being one of the ones that Obamacare is rigged against. I'll trade with you any day :-).

only-sane-one-here
only-sane-one-here

Why not write about "the better ways to deal with this debacle?" True to form, the GOP creates all manner of uncertainty with no solutions. And now that everyone knows they have no solutions after 60+ repeal and replace votes, Then Trump removing ACA subsidies and not being clear on policy changes, premiums will rise. Businesses hate uncertainty. There is enough blame to go around for sure. But Trump cancelled the Iran nuclear deal with no plan too but says he will also do a bigger, more complex Iran nuclear deal. He says its all "easy". Let the clock start. I expect affordable health care for everyone like he promised - and real soon and a new nuclear deal to be done in a lot less than the 20 months it took the Obama team. Like we say in Texas, "get-er done!"

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