Stanley Feld M.D., FACP,MACE
The insurance industry announced that insurance premiums in both the federal and state health insurance exchanges are going up to 50% in 2016. The group private markets will increase by the same percentages.
Insurance rates for 2015 were unaffordable for small businesses, and large corporations.
One church that buys insurance in the private healthcare insurance market had its rates increased 37%.
Instead of dropping insurance for their employees and paying the penalty, the church agreed to the pay the increased premiums. The church compensated for this increase in expenses by increasing church membership dues. Some members had to quit the church.
Eighty-five percent of members in Obamacare are receiving a government subsidy. A high percentage of that 85% are receiving higher subsidies than they are entitled to receive because of government lack of verification.
Eventually, when healthcare.gov website connects with the IRS, the government will find out that people received higher subsidies than they are entitled to. The recipients will get a bill they cannot afford.
Obamacare’s reinsurance subsidies for the health insurance industries are expiring in 2016.
The insurance industry is raising insurance premiums to cover the revenue lost by not receiving the Obamacare insurance company subsidies in 2016.
President Obama opened the Obamacare reinsurance program when too few insurance companies signed up to sell insurance through the health insurance exchanges.
The reinsurance program was a subsidy to cover the healthcare insurance industry’s supposed loses.
Obamacare hoped that multiple insurance companies would sign up in order create price competition among the companies and result in lower consumer premiums.
The healthcare insurance industry did not want to sign up. The insurance companies knew there would be adverse selection for insurance consumers.
Sicker people would enroll in the federal or state Health Insurance Exchanges. These sicker people could not afford or were not eligible to buy private healthcare insurance. The participating insurance companies would be at risk to pick up these sicker and more expensive patients.
“After finding that new customers were sicker than expected, some health plans have sought increases of 10 percent to 40 percent or more.”
Obamacare healthcare insurance coverage requirements would also cause them to seek an increase in premiums.
None of these issues appear in news stories that are covering this aspect of the story.
The political spin by the Obama administration is that the Obama administration is trying to persuade states to cut back big rate increases requested by many health insurance companies for 2016.”
I predict if the insurance companies do not get their rate increases they will drop out of the healthcare insurance market.
This is exactly what the Obama administration wants. It is a de-facto victory for a single party payout system and all of its ramifications.
It will not work because the Obama administration still needs the healthcare insurance industry to process and pay the claim. The result will be a higher premium for the consumer and an increased payout to the healthcare insurance industry by the government.
The government will be required to raise taxes or increase the deficit.
The facts spin war is starting. Mr. Counihan said in a letter to state insurance commissioners “Recent claims data show healthier consumers.”
This is apparently not true.
Scott Keefer, a vice president of Blue Cross and Blue Shield of Minnesota, which requested rate increases averaging about 50 percent for 2016, said his company had not seen an improvement in the health status of new customers.
“Our claims experience has not slowed at all,” Mr. Keefer said. “The trend has gotten a little worse than we expected.”
I have recently shown that the Obama administration’s claim that it is bending the cost curve is fiction. The cost to the government and the direct out of pocket cost to the consumers has increased.
The government costs have not risen as quickly as predicted by some but they are rising even more now.
Another weak argument the Obama administration is using is the federal tax penalty is increasing in 2016.
“The federal tax penalty for going without insurance will increase in 2016, he said, and this “should motivate a new segment of uninsured who may not have a high need for health care to enroll for coverage.”
Why should these people buy insurance when they cannot afford the premiums or the deductibles?
Two additional weak arguments are being used.
“Federal officials said, much of the pent-up demand for health care has been met because consumers who enrolled last year have received treatments they could not obtain when they were uninsured.”
There has not been a very large increase in those insured by the state and federal exchanges between 2013 and 2014 to eliminate the “pent up” demand.
“Federal officials have also told state regulators that medical inflation will be less than what many insurers assumed in calculating their rates for 2016.”
The Obama administration has told these lies over and over again.
Does the president really believe if you tell a lie over and over again it becomes the truth?